PRIOa   25    CENTS. 


A  COMPENDIUM 


OF  THE  WORLD'S 


Food  Production  and  Consumption 

The  Railway         The  Market  Wrecker. 


C.  WOOD  DAVIS. 

.\UTHOR  OF  VARIOUS  PAPERS  IN  THE  '  FORaM,"  "ARENA"  AND  OTHER  PERIODICALS. 


I.  Food  and  Population,  .        .        .        .        .1 

II.  The  Exhaustion  of  The  Arable  Lands.    "Forum"        10 

III.  Some  Impending  Changes, 17 

IV.  The  Farmer  in  The  Coming  Change,    ...         22 

V.  An  Epitome  of  The  Agricultural  Situation,       .         .    24 

VI.  Some  Surplus  Producing  States,     ....        26 

VII.  An  Open  Letter, 29 

VIII.  The  Market  "Wrecking  Short-Seller— A  Menace,     .        31 

IX.  The  Farmer,  The  Investor,  and  The  Railway.  "Arena"  37 

X.  Should  The  Nation  Own  The  Railways  ?   "Arena"        49 

XI.  The  (Chicago)  Economist's  Opinion  of  Short-Selling,    63 

XII.  Market  Wreckers  Prevent  an  Advance  in  Values,         65 

XIII.  Some  Phrases  of  Short-Selling, 67 

XIV.  Opinions,  Professional  and  Other,  of  Market  Wrecking,  69 

XV.  The  Value  of  a  Trade  Journal's  Data,   ...        72 


The  thanks  of  the  Public  and  the  Author  are  due  to  the  manj' 
Foreign  Officials  and  American  Ministers  and  Consuls  who  have 
courteously  aided  in  collecting  the  official  data  embraced  in  these 
pages,  and  which  gives  them  such  value  as  they  may  possess. 


PUBLISHED  BY  THE  AUTHOR, 
QODDAKD,  KANSAS.  U.  S.  A. 


EAGLC  PRINTING   HOUSE,  WICHITA.   KANSAS. 


Copyright,  1891,  by  C.  Wood  Davis.       All^Ribhts  Reserved. 


(In  preparation  and  will  Issue  in  I892.) 

"THE   FOOD  SUPPLY." 

PRESENT  AND   FUTURE. 

BY 

"  C-   T^7"OOI3  X)-A-TriS. 

In  which  will  be  reviewed  the  condition  of  Agriculture  in  each  (separately)  of  the 
grain-growing  countries,  official  data  being  tabulated  (for  each)  showing,  for  a 
series  of  recent  years,  the  acreage  devoted  to  the  production  of  each  of  the  food 
staples  as  well  as  the  production,  consumption,  exportation  and  importation  of  each 
staple  product  and  the  per  capita  requirements  ;  the  design  being  to  Include  all  the 
food-bearing  areas  contributing,  materially,  to  the  subsistence  of  the  bread-eating 
peoples  with  the  hope  that  the  work  can  be  so  thorouphlydone  as  to  render  the  book 
of  value  to  all  classes  and  desirable  for  reference.  To  this  will  be  appended  such 
of  the  papers  of  the  Author,  heretofore  published,  as  appear  to  have  permanent  value. 


MMi 


"A  KANSAS  RANCH," 

BY  

Marie  M.  and  C.  Wood  Davis. 


A  ROMANCE  OF  EARLY  KANSAS  DAYS. 


and  showing  the  methods  of  railway  manipulation  and  who  were 

THE    manipulators, 


Is  ID  preparation,  and  will  appear  early  in  1892. 


FOOD    AND   POPULATION. 

Since  1870  food  has,  relatively  to  population,  been  more  abundant  and  procurable 
at  a  less  expouditure  of  lalior  tlian  at  ;uiy  tinii^  in  the  history  of  tlie  race,  and  the  absence 
of  war  and  the  abundance  and  cheapness  of  the  means  of  subsistence  have,  among  th« 
industrial  classes,  stimulated  marriage  with  the  result  of  unprecedented  additions  to  the 
populations  of  European  blood  and  the  enthusiast,  without  over-much  reflection,  haa 
assumed  that  humanity  was  entering  upon  an  age  when  neither  war,  want  nor  scarcity- 
would  be  known.  It  is,  however,  very  questionable  if  this  view  of  the  situation  is  tena- 
ble, and  investigations— begun  some  years  since  by  the  writer— the  results  of  which  are 
now  embodied  in  tabulations  of  official  data,  as  to  the  relative  rates  of  increase  of  the 
consuming  populations  and  the  productive  power  (as  shown  by  the  acreage  at  the  close  of 
the  7th,  8th  and  9th  decades)  of  the  fields  of  the  temperate  zones  render  it  more  than 
doubtful  as  to  any  prolongation  of  this  period  of  abundance  and  cheapness. 

That  the  treatment  of  this  question  may  partake  as  little  as  possible  of  the  specu- 
lative and  explore  only  that  future,  where  probable  conditions  may  reasonably  be  assumed 
from  those  now  existaut.  it  is  the  purpose  to  limit  the  period  under  review  to  the  eighth 
and  ninth  decades  of  the  nineteenth  century  I'u  1  extend  the  prevision  no  farther  than 
the  close  of  the  first  decade  of  the  tweutietji. 

Such  limitation  of  the  retrospective  is  rendered  necessary  by  the  fact  that  agricult. 
ural  statistics  are  of  such  recent  growth  that  "looking  backward"  beyond  1870  would  be 
venturing  into  a  realm  where  no  reliable  data  exists. 

Under  the  designations  of  "bread-eating  populations"  and  "bread-eaters"  are 
included  only  the  peoples  of  Europe,  the  United  States,  British  America,  the  Cape  regions 
of  South  Africa,  Australasia,  South  America  south  of  the  tropics,  and  the  colonial 
European  populations  of  the  islands  and  tropical  regions,  the  geographical  distribution 
having  been  as  follows  at  the  close  of  the  last  three  decades: 

1876  1H.S0  1S90 

Europe .303  000,000 329,000,000 3fiK  000,000 

United  States 38,000,000 .50,200,000 G2  .'")(I0,000 

Canada 3,000,000..: 4,300,01)0 .5,300,000 

Australasia 2,000,000 2,900  000 4,200,000 

Temperate  South  America .5,000  000 6,600.000 8,200.000 

South  Africa  and  Islands 6,800,000 7.000,000 7,800,000 


Totals 359,000,000 400,000,000 456  000,000 

For  the  reasons  stated  the  aggregate  increase  of  the  bread-eating  populations  and 
the  rate  of  increase,  during  the  eighth  decade,  were  greater  than  ever  before  known, 
necessitating  the  opening  of  new  sources  of  food  supply,  such  sources  having  been  mostly 
found  upon  the  fertile  plains  of  North  America  and  in  newly  developed  Indian  ex]:>ort3 
and  the  supplies  from  these  sources  increased  so  rapidly  that  in  the  latter  part  of  the 
decade  they  became  excessive,  as  is  clear  from  the  descending  scale  of  prices  then  obtain- 
ing and  the  fact  that  the  per  capita  quota  of  land  in  wheat  increased  from  .427  of  an  acre 
in  1870  to  .443  of  an  acre  in  1880  and  this  apparently  trifling  addition — aggregating,  how- 
ever, 6  400,000  acres — to  the  acreage  quota  resulted  in  unusual  aluuidance,  great  reduction 
in  the  cost  of  bread  and  all  primary  food  staples  and  a  proportionate  lowering  of  the 
returns  of  cultivator  and  laii<llord  and  showing  with  what  certainty,  and  to  what  degrto, 
even  so  trifling  a  disturbance  of  the  exact  and  delicate  relations  existing  between  produc- 
tion and  consumption  will  afTect  the  price  of  those  things  which  render  civilized  life 
possible. 

The  cheapening  of  the  means  of  subsistence  and  accompanying  peace  has,  in  Eurupe, 
been  folhwed  by  an  increase  in  the  relative  number  of  marriages  and  births  and  at  the 
same  time  cheap  and  more  abundant  nourishment,  coupled  with  better  sanitary  eoiidi- 
lions,  have  added  to  the  average  duration  of  life,  the  result  being  that  the  bread-eaters  oj 


FOOD   AND   POPULATION. 


the  world  increased,  during  the  eighth  decade  at  the  rate  of  11.4  per  cent.,  while  the 
means  of  subsistence,  as  measured  by  the  area  devoted  to  the  productiou  of  grain  and 
potatoes,  increased  12  5  per  cent.,  as  set  forth  in  the  following  table: 

TUE  WORLD'S  AREA  IN  FOOD  STAPLES. 


Products. 


1880 


.\cres. 


Wheat 15.S,3«2,000, 

Bye '    109,076,000, 

~     "  4o.386,000 

78,700,000 
84,178,000 


Acres. 


20  Yrs  Incr'se 

aud  Decrease 

in  Acres 


Barley , 

Oits 

Miiize,  etc. 

Potatoes '      21,7«o,000 


177,310,000 
10S,34o,000 

43,480,0(10; 

90,903  000 

110. .377,000 

23,616,000 


Totals I    492,467,000 


554,031,000 


181,474  000 
108,364,000 

44,650,000 
104,888.000: 
127,832,000. 

25,839.000, 


28,112,000 

712,0(l0t 

736.000t 

26,188,000* 

43,654.000* 

4.074,000* 


593  047,000,  l(.i0,580,000t 


20  Yr.'!.  Incr'se 

and  Decrease 

per  cent. 


11.8* 

1.6t 
33  3* 
52.0* 
18.7* 


20. 4t 


•  indicates  Increase  and  t  decrease.    tNet  increase. 

In  twenty  years  we  find  an  increase  ot  20.4  percent,  in  the  aggregate  acreage  of  all 
food  staples  as  against  an  increase  of  27  per  cent,  in  the  bread-eating  populations  and 
taking  into  consideration  only  the  two  principal  bread-making  grains — wheat  and  rye — 
the  increase  has  been  but  10.4  per  cent.,  from  which  it  appears  that  during  the  twenty' 
years  the  bread-eaters  have  increased  more  than  two  and  a  half  times  as  fast  as  the  mate 
rial  from  which  bread  is  made. 

During  the  eighth  decade,  however,  the  wheat  acreage  increased  15.6  per  cent,  as 
against  an  increase  in  the  consuming  element  of  11.4  per  cent,  and  the  result  was  an  ex. 
cessive  production  of  wheat,  a  part  of  which  was  consumed  to  make  up  for  the  diminish- 
ing production  of  rye  and  the  remainder  accumulated  as  a  reserve  which  has  sufficed  to 
tide  over  later  years,  when  both  acreage  and  current  production  have  been  less  than 
current  nte  Is. 

During  the  earlier  j-ears  of  the  ninth  decade  the  acreage  in  food  staples  continued 
to  increase  more  rapidly  than  population,  although  the  rate  of  such  increase  was  progress- 
ively lessening,  and  about  the  middle  of  the  decade  fell  in  the  rear  of  the  population 
rate,  which  progressed  from  the  11.4  per  cent,  of  the  eighth  decade  to  14  per  cent.,  the  ag" 
gregate  increase  being  56,000,000  as  against  41,000,000  of  the  preceding  ten  years. 

From  the  foregoing  tables  it  api^ears  that  while  population  has,  by  peace  and  an 
abundant  supply  of  the  cheapest  food  ever  known,  been  stimulated  to  such  an  increase 
the  area  devoted  to  staple  food  crops  has  of  late,  ceased  to  expand  in  like  proportion  and 
the  acreage,  relatively  to  population,  has  shrunken  to  le.ss  than  that  of  the  earlier  years  of 
the  eighth  decade,  when  the  bread-making  grains  bore  a  price  85  per  cent,  higher  than 
that  obtaining  in  1890. 

At  the  close  of  the  eighth  decade  the  per  capita  quota  of  land  in  wheat  was  .443  of 
an  acre,  but  at  the  close  of  the  ninth  decade  the  bread-eaters  had  so  increased  that  the 
acreage  of  wheat,  upon  which  each  unit  of  the  population  could  draw,  had  diminished  to 
.898  of  an  acre,  being  seven  per  cent,  less  than  the  .427  of  an  acre  quota  of  1870,  when  the 
price  was  85  per  cent,  higher.  The  reasons  for  this  abnormal  condition  of  the  supply,  as 
related  to  the  exceptionally  low  prices  prevailing  from  1884  to  1890  inclusive,  are  to  be 
<ound  in  that  the  world's  wheat  acreage  (as  measured  by  the  area  per  capita  in  cultivation 
during  the  earlier  years  of  the  eighth  decade  when  prices  were  such  as  to  indicate  that 
the  supply  was  neither  over-abundant  nor  deficient)  was  excessive  in  ISSO  by  some 
6,4(0  000  and  had  been  excessive  for  some  years  prior  thereto  and  so  continued  up  toabout 
the  middle  of  the  ninth  decade,  such  excess  gradually  disappearing— as  population  in- 
creased without  a  proportionate  increase  in  wheat  acreage — and  consumption  overtaking 
current  production,  such  productiou  has  since  been  deficient  with  the  exception  of  year* 
when,  as  in  1887,  the  yield  has  been  much  above  the  average. 

During  the  existence  of  an  excessive  acreage  accumulations  of  bread-stufl's — large 
In  the  aggregate — were  made  in  mill,  warehouse  and  farm  gi-anery.  the  world  over,  and  in 
the  years  of  excessive  area  the  product  of  one  harvest  (.ver-lai)ped  the  succeeding  one  in 
such  a  way  that  even  two  such  short  (world)  crops  as  those  of  1S.S5  and  1886  had  no  eflect 


FOOD   AND   POPULATION. 


in  a  lv.iaciii?  prices,  altliou^li  they  were— reapectively— 59,000,000  and  93,000,000  busliela 
below  tbo  average.  Indeed,  the  price  continued  to  fall,  tlie  average  (gold)  price  per 
bushel  lor  tlie  year  (in  England)  dropping  from  ifl.OT  iu  1SS4  to  99  cents  in  1885,  and 
then  to  94  cents  in  1880.  On  the  otlier  IkukI,  when  aocumul;«tions  have  been  exhausted, 
as  after  the  world,  in  the  Inirvest  of  1890,  liad  garnered  a  crop  50,000  000  bushels  above  the 
average;  so  greiit  has  been  the  growth  of  population,  so  small  the  increase  af  acreage  and 
product  and  so  complete  the  exhaustion  of  the  reserves  that  the  piice  at  which  the  great 
crop  of  1890  has  been  sold  will  average  25  per  cent  greater  than  that  received  for  the  defi- 
cient one  of  1889,  which  was  137  000  000  bushels  less  but  was  supplemented  by  the  residue 
of  the  reserves  accumulated  in  the  earlier  part  of  the  ninth  decatle  and  from  the  great 
crop  of  1887,  which  was  the  largest  ever  produced. 

From  the  best  data  obtainable  the  world  appears  to  have  priniuced,  during  each  of 
the  past  ten  years,  the  quantity  of  wheat  stated  in  the  following  table: 


YEAR 


BUSHELS 
OF  WHEAT 

1881. 1,977  000  OOO 

1882 2,263  000,000 

1883 2,0-i0,000  000 

1884 2,26:!,000,000 

1885 2,077,000,000 


YEAR 


BUSHELS 
OF  WHKAT 

188(i 2  043.000,000 

1887 2,2H7,000.000 

1888 2,183.0011,000 

1889 2  048,000,000 

1890 2,185,000,000 


Yearly  average,  1881  to  1885  inclusive 2.126,000,000  bushels 

1886  to  1890        "  2  145,000,000  bushels 

"  "        for  the  decade 2.130,000.000  bushels 

While  in  the  eighth  decade  the  relative  increase  in  wheat  acreage  and  population 
was  as  four  is  to  three  the  increase  in  the  ninth  was  in  the  inverse  ratio  of  one  to  six. 

In  the  eighth  decade  the  per  capita  quota  of  land  in  wheat  increased  3.8  per  cent., 
yet  in  the  ninth  it  diminished  10.2  per  cent,  and  is  now  7  per  cent,  less  thun  in  1870. 

During  the  eighth  decade  the  area  in  all  food  staples— exclusive  of  the  United  States 
— increased  but  9,375,000  acres,  being  2.2  per  cent.,  as  against  an  increase  in  the  bread- 
eating  populations — also  exclusive  of  the  United  States — ^of  29,400,000,  or  9.2  per  cent.,  the 
ratio  being  as  one  is  to  four  and  a  half. 

During  the  ninth  decade  the  area  in  all  food  staples— exclusive  of  the  United  States 
— increased  but  9,011,000  acres,  being  2  per  cent.,  as  against  an  increasein  the  bread-eating 
populations — also  exclusive  of  the  United  States — of  43,700,000,  or  11.1  percent.,  the  ratio 
being  as  one  is  to  five  and  a  half. 

During  the  twenty  years  from  1870  to  1890  the  area  in  si;aple  food  products  iu  the 
temperate  zones — exclusive  of  the  United  States — increased  but  18  386,000  acres,  being  4.4 
per  cent.,  as  against  an  increase  in  the  bread-eaters — also  exclusive  of  the  United  States — 
of  73,100,000  or  22.8  per  cent.,  the  ratio  being  as  one  is  to  five. 

Including  the  acreage  and  population  of  the  United  States  the  world's  increase  of 
area  under  the  staple  food  crops  of  the  temperate  zones  has  during  the  last  twenty  years, 
been  100,580  000  acres  and  the  rate  of  increase  20.4  per  cent,  as  against  an  increase  in  the 
bread-eating  populations  of  27  per  cent.,  the  ratio  beiugasthreeistofour.  The  aggregates 
and  per  centages  of  such  increase  and  the  acreage  quota  of  eai  h  unit  of  the  bread-eating 
populations  at  the  end  of  each  of  three  decennial  periods  have  been  as  shown  in  the  fol- 
lowing table: 


Year 

Bread-Eating 
Populations 

Increase 
Per  Cent. 

World's  Area 

In 
Food  Staples 

Aggregate 
Increase 
in  Acres 

Increase 
Per  Cent. 

Acreage 

Quota 

Per  Capita 

1870 

359  000,000!          

492,167,000 
5)4,031.000 
593,047,000 

1.37 

1880 

400,000,000 
456,000,000 

11.4 
14.0 
27.0 



61,564,000 

12.5 

1.39 

1890 

20  yrs.  increase 

39,016,000:            7.0 
100,580,000          ''0.4 

1.30 

The  increase  in  acreage,  during  the  eighth  decade,  was  one-tenth  greater  than  the 
iucrca.se  in  population  and  the  lesnlt  low  prices  for  farm  products  and  a  gi'eat.  shrinkage 
in  land  values  the  world  ovei'. 

During  the  ninth  decade,  on  the  contrary,  population  increased  at  a  ratedouble  that 


FOOD   AND   POPULATION. 


obtaining  as  to  acreage  iu  food  staples,  the  result  now  being  an  ascending  scale  of  prices 
for  farm  products,  an  advance  in  land  values,  coming  scarcity  and  a  very  brisk  demand 
for  farm  products, 

A  most  significant  fact,  made  very  clear  by  the  forgoing  table,  is  that  with  a  seventh 
mor«  people  to  feed  the  increase  in  the  acreage  devoted  to  food  production,  during  the 
ninth  decade,  was  but  a  little  more  than  half  what  it  was  in  the  eighth,  when  to  have 
kept  pace  with  the  increase  in  population  it  should  have  been  36  per  cent,  greater  and 
there  can  be  no  reasonable  doubt  that  but  for  the  acreage  iu  excess  of  current  needs,  exist- 
ing at  the  beginning  of  the  ninth  decade,  the  pinch  of  scarcity  would  long  since  have 
been  felt. 

It  is  equally  significant  that  the  United  States  has  contributed  such  a  very  large 
proportion  to  of  all  recent  additions  to  the  world's  food  producing  areas,  the  extent  and 
proportions  6f  such  contributions  being  made  clear  in  the  subjoined  table,  where  is  shown 
the  aggregate  of  all  such  additions,  the  number  of  acres  contributed  by  the  United  Slates 
and  the  percentage  of  the  whole  so  contributed: 


Year 


1S70 

1880 

IS'jO... 

20  years  increase.. 


World's  Area 

in 
Food  Staples 


492,467,000 
554  031  000 
593,047,000 


Total  Acres    !         Acres 
Add'd  to  Area  C'nlrib'ted  by 
in  Food  St'pl's  United  Slates 


Percentivce 
C'ntrib'ted  by 
United  .States 


6I,564,000:      52.189,000 

39.016  000       29,945,000 

100,580,000,      S2  134,000 


84.7 

77.0 
81.7 


This  and  the  preceding  tables  show  that  during  the  last  twenty  years  the  consum- 
ing population  has  increased  one-third  faster  than  the  products  to  be  consumed  but  this 
disproportionate  increase  has  all  occurred  in  the  ninth  decade  (and  the  greater  part  of  it 
within  the  last  five  years),  as  in  the  eighth  decade  the  increase  in  acreage  was  12.5  per 
cent,  as  against  an  increase  in  population  of  11.4  per  cent.,  while  in  the  ninth  the  proper, 
tions  have  been  an  increase  of  14  per  cent,  iu  the  consuming  element  and  but  7  per 
cent,  iu  the  area  devoted  to  all  food  staples. 

Of  the  100,580,000  acres  added  to  the  world's  food  producing  area  it  is  shown  in  the 
last  table  that  no  less  than  82,000,000,  or  nearly  82  per  cent.,  must  be  credited  to  the  United 
States  and  during  the  15  years  ending  with  1885  our  additions  were  quite  equal  to  the 
entire  added  requirements  of  the  world.  Since  18S5,  however,  our  additions  to  the  area  in 
staple  crops  has  been  less  than  half  that  required  to  meet  the  increasing  needs  of  our  own 
population,  hence  we  have  found  it  necessary  to  draw  the  needed  supplies  from  the  acreage 
heretofore  employed  in  producing  food  for  exportation  and  the  21 ,00(1,000  acres  so  employed 
in  1885  has  now  been  reduced,  by  augmenting  domestic  needs,  to  10,000,000  and  as  we  shall 
at  no  remote  day.  require  the  entire  product  of  our  fields,  we  may  well  ask  when  will 
such  conditions  obtain,  how  will  the  world  then  fare  for  food  and  whence  can  Europe 
hope  to  draw  the  needed  supplies? 

In  dealing  with  these  problems  bread-stufTs  will,  as  in  the  commercial  and  agricult- 
ural world,  be  treated  as  the  controlling  factor  and  for  this  purpose  wheat  and  rye  should 
be  considered  as  one. 

Of  the  two  principal  bread-making  grains  rye  constitutes  about  38  per  cent,  and  en- 
ters iu  the  proportion  of  47  per  cent,  into  the  bread  consumed  iu  Europe. 

The  wheat  area  of  the  world,  any  part  of  the  product  of  which  finds  its  way  into 
the  channels  of  commerce,  has,  during  the  last  decade,  produced  crops  averaging  2,1.36,- 
000,000  bushels  per  annum,  the  average  for  the  five  years  ending  with  18S5  being  2,126,- 
000,000  as  against  2,145,000,000  bushels  during  the  last  five  years,  this  increase  of  19,000,000 
bushels  being  in  accord  with  an  increase  in  area  found  to  be  less  tha;;  2,000  000  acres 
although  in  the  meantime  the  added  requirements  of  the  added  bread-eaters  have  been  such 
that  the  producing  area,  to  have  kept  pace  with  such  needs,  should  have  increased  not 
less  than  13,000,000  acres,  and  there  was  a  small  acreage  deficit  as  early  as  1SS5  and  the  re- 
quirements are  now  such  that  an  average  yield,  from  every  acre  iu  the  world  devoted  to 
wheat  culture,  would  give  a  product  fuU.v  100,000.000  bushels  less  than  current  needs,  and 


FOOD   AND    POPULATION. 


this  deficit,  growingoutofau  acreage  10,000,000  to  12,000  000  acres  too  small  for  the  world's 
requirements,  is  augmenting  at  the  rate  of  more  than  2,000,000aeres  yearly,  and  will  so  long 
as  the  additions  to  the  world's  wheat  area  are,  as  of  late  years,  less  than  400,000  acres  per 
annum. 

There  also  exists  a  very  great  deficit  in  the  rye  acreage,  the  extent  of  which  it  is 
difficult  to  measure,  as  during  the  period  when  wheat  was  over-abundant  and  rye  grow- 
ing relatively  scarce  wheat  was  largely  substituted  for  the  deficient  rye  (as  is  now  being 
done  in  Germany  and  Russia),  but  we  get  some  idea  of  this  deficit  when  we  as- 
certain that  in  1870,  wheu  the  per  capita  quota  for  the  world's  bread-eaters  was 
.427  of  an  acre  of  wheat,  that  of  rye  was  .304  of  an  acre  and  is  now  reduced 
to  .238  of  an  acre,  the  per  capita  quotji  of  wheat  and  rye  then  being  .731  of 
«n  acre  as  against  .636  of  an  acre  in  1890,  the  reduction  in  the  per  capita  acreage — as  com- 
pared with  that  of  the  early  part  of  the  eighth  decade— of  the  two  grains  being  .095  of  an 
acre,  or  13  per  cent.,  and  indicating  a  shortage  of  43,000,000  acres  unless  in  the  meantime 
other  forms  of  food  have  been  substituted  for  the  deficient  wheat  and  rye,  and  such  has 
doubtless ; been  the  case  to  some  extent  in  Russia,  and  possibly  other  countries,  where 
maize,  millet  and  other  cheap  forms  have  been  substituted,  but  such  substitutions  can  not 
have  been  considerable,  as  European  production  of  no  one  of  the  food  staples  has  kept 
pace  with  the  increase  of  European  population,  as  is  clear  from  the  following  table,  show- 
ing European  acreages  in  the  various  staples  at  the  end  the  last  three  decennial  periods 
and  the  aggregates  and  percentages  of  increase  and  decrease: 


Products 

1870 

1880 

1890 

Increase  and 
Decrease 

Acres. 

Increase  and 
Decrease 
Per  Cent. 

Acres 

Acres 

Acres 

Wheataud  SpeltJ 

93,989,624 
107  827.389 
39,392,899 
68  008.422 
42,682,017 
19,947,017 

93,190,754 
106,440,143 
36  380,668 
71,417,938 
44  244,679 
21,196,381 

94,445,613 
105.876,411 
36,009,809 
73,608,435 
43  928,806 
22,664,761 

455,989* 
l,950,958t 
3,383,090t 
5,600,013* 
1,246,678* 
2,717,744* 

.49* 

1.81t 
8.58t 
8.24* 

Barley 

Oats 

Maize,  etc 

2.92* 

13.50* 

Tola's 

371,847.368 

372  870,563 

376,533,835 

Twentv  vears  net  increase.. 

4,686,000* 

1  25* 

*  Indicates  Increase  and  t  decrease.  tSpelt  Is  a  variety  of  wlieat  and  maslln  is  rye  and  wheat  sown  trgether^ 
It  may  be  assumed  that,  for  some  time,  the  bread-eating  populations  will— unless 
food  becomes  exceedingly  scarce  and  high — increase  nearly  as  fast  as  during  the  ninth  de- 
cide, but  to  be  clearly  on  the  safe  side,  the  increase,  during  the  remainder  of  the  century, 
will  be  estimated  at  11  per  cent,  and  for  the  ensuing  ten  years  at  10  per  cent.,  and  estimat. 
ing  that  the  per  capita  requirements  will  equal  those  of  the  earlier  years  of  the  eighth  de- 
cade, when  the  price  of  bread-stu&s  was  85  per  cent,  greater  than  in  1890,  population  and 
additional  acreage  requirements  for  1900  and  1910  are  estimated  at  the  numbers  stated  in 
the  following  table: 


Year 

Estimated 

Bread-Eating 

Population 

Additional  Acres 

Wheat 

Required 

Additional  Acres 

Rye 

Required 

Additional  Acres 

Other  Staples 

Required 

Total  Additional 

Acres 

Rciiulred 

1900 

506  000,000 
556,000,900 

21,000  000 
21,000,000 

15,000,000 
15,000,000 

32  000,000 
32,000,000 

68,000,000 

1910 

68,000,000 

Totals.... 

42  000  000 

30,000,000 

64  000  000 

136,0(10,000 

Granting  the  substantial  correctness  of  the  preceding  estimate,  it  follows  that  the 
world  must,  within  ten  years,  add  68,000.000  acres  to  the  food  producing  areas  of  the  tem- 
perate zones,  or  reduce  the  standard  of  living  in  the  same  ratio  as  the  added  acreage  falls 
short  of  the  requirements,  and  must  add  many — 30  to  40 — millions  to  make  good  the  ex. 
isting  deficit  in  wheat  and  rye  areas.  In  the  next  decade  another  68,000,000  acres  must  be 
added,  hence  it  is  safe  to  say  that  during  the  next  twenty  years  the  additions  to  the  acre- 
age must  be  two-thirds  greater  than  during  the  last  twenty,  aud  such  additions,  if  we  are 
^o  continue  the  present  standard  of  living,  can  not  be  less  tha  166,000,000  acres. 


c 


P^OOD    AND    POPULATION. 


Where  is  it  possible  to  find  such  :i  quantity  of  avaihible  laud  with  the  populatiom 
necessiiry  to  its  culliviUion? 

When  we  reflect  that  the  basis  from  wliieh  we  now  start  to  add  to  the  consuming 
population  is  117  per  cent,  greater  than  twenty  years  since  and  tliat  lliis  population  is,  by 
reason  of  its  greater  volume  and  the  long  prevalence  of  peace,  increasing,  in  the  aggre, 
gate,  twice  as  fast  as  it  did  thirty  years  ago,  that  the  augmentalion  during  the  coining 
twenty  years  will  be  a  half  greater  than  the  present  population  of  the  United  States,  tliat 
their  requirements  for  food  are  inereasing  in  like  ratio  and  that  the  available  lauds  are 
daily  becoming  less  abundant,  the  tas'<  before  the  generation  becomes  more  plain  and  its 
difficulties  such  as  to  address  themselves  to  the  thoughtful  attention  of  those  who  have 
been  entrusted  with  the  direction  of  public  afTairs,  and  it  were  well  to  take  careful  ac- 
count of  the  world's  resources. 

Some  will  suggest  that  Providence  will  care  for  our  welfare  and  see  that  the  children 
of  men  do  not  want,  while  others  will  advance  the  theory  that  the  acreage  under  cultiva- 
tion can,  by  better  methods,  be  made  to  produce  much  more;  some  enthuastic  writers 
placing  the  increment  from  better  methods  at  100  per  cent.,  but  they  are  evidently  not 
av/are  that  changing  meteorological  conditions  are  the  controlling  factors  in  agricultural 
production,  nor  can  they  be  very  well  acquainted  with  the  characteristics  of  the  cultivat- 
ing class  who,  timeout  of  mind,  have  been  proverbial  for  the  reluctance  with  which  they 
change  processes  handed  down  from  father  to  son.  While  it  is  probable  that  additions  to 
the  acreage  yield  will  result  from  the  adoption  of  better  methods  of  culture  and  fertiliza- 
tion, yet  the  improvement  in  this  direction  is  likely  to  be  so  slow  as  to  be  hardly  apprecia 
ble  with  the  passage  of  a  limited  number  of  years. 

Others  believe  that  such  improved  methods  will  no  more  than  maintain  the  existing 
fertility  of  the  cultivated  lands,  contending  that  its  original  fertility  is  being  rapidly  dis- 
eipated  and  instance  in  proof  of  such  contention  the  diminishing  production  of  American 
fields,  as  shown  in  the  reports  of  the  Department  of  Agriculture,  and  such  argument  is 
not  without  weight,  if  but  the  face  of  the  returns  is  looked  at,  as  they  show  average 
yields  per  acre  as  follows: 


Products 

Average  yield  per 

Acre  8th  Decade 

iu  Bushels 

Averajre  yield  per 

.■Vcre  lith  Decade 

in  Bu.shels 

Percentages 

of 

Decrease 

27.1 
12.4 
28.4 
22.0 
14.1 
17.7 

24.1 
12.1 

2fi.6 
21.7 
11.9 

12.8 

125 

Wheat -^ 

2.5 

Oats 

6.8 

Barley 

1.4 

Rye 

15.6 

Buckwheat 

27.6 

While  there  has  clearly  been  a  reduction  in  the  acreage  yield  due  to  diminishing 
fertility,  or  the  bringing  under  cultivation  of  lands  of  lower  productive  power,  this  show, 
ing  is  deceptive  in  as  much  as  the  acreage  in  all  crops  was,  each  year  of  the  eighth  decade^ 
greatly  understated  by  the  Department,  as  was  made  manifest  by  the  census  of  1880,  when 
the  departmental  returns  were  found  to  be  some  26,000  000  acres  less  than  the  census  count, 
and  such  under-estimate  necessarily  increased  the  reported  product  per  acre  and  these 
errors,  exceed,  except  iu  the  case  of  rye,  the  last  ten  years'  reduction  iu  acreage  yieldi 
thus  vitiating  all  arguments  based  upon  the  diminishing  yield  shown  by  the  Depart- 
mental reports  without  rendering  it  necessary  to  resort  to  the  explanation,  advanced  by 
the  Departmental  statistician,  that  the  diminishing  yield  was  due  to  a  succession  of  un- 
favoralde  seasons. 

The  writer  believes  that  the  increased  production  which  will  result  from  the  adop- 
tion of  better  methods  of  culture,  in  suburban  and  other  favorably  located  districts,  will 
no  more  than  compensate  for  the  lessening  yield  of  more  remote  districts  and  the  con- 
stant addition  of  acres  of  lower  average  fertility. 

Continued  cultivation  will  lessen  the  productive  power  of  the  soil  where  the  means 
or  incentive  for  fertilization  are  lacking,  and  this  is  as  true  of  India  as  of  the  United 
States,  a.9  lands  that,  in  the  reign  of  Akbar,  gave  an  average  .yield  of  19  bushels  of  wheat 


FOOD   AND    POPULATION. 


jier  acre  now  yiehl  Imt  14,  the  rciUiction  being  more  limn  20  per  cent,  and  due  to  continued 
use  without  proper  fortilizutinn. 

An  increase  in  produeiion,  due  to  better  metbods,  will  come  so  slowl.v  as  to  be  of 
little  avail  in  relieving  necessities  tluit  will  soon  be  very  pressing  and  to  meet  the  require- 
ments of  llie  near-by  years  we  must  depend  largely  upon  an  extension  of  the  cultivated 
area,  hence  it  is  pertinent  to  enquire  where  exist  available  lands,  what  are  their  extent, 
and  can  the  bread-eating  world  rely  upon  development  keeping  pace  with  increasing  re- 
quirements? 

Aside  from  lauds  that  may  be  brought  into  use  for  pasturage  the  writer  has — in  the 
Forum  for  June,  1890,  and  elswhere— estimated  that  possibly  35,000,000  acres  will,  within 
twenty  years,  be  added  to  the  area  in  the  United  States  devoted  to  the  production  of  sta- 
ples, and  while  otflcials,  employed  to  enquire  into  the  extent  of  the  irrigable  lands  of  the 
iirid  districts,  express  the  opinion  that  a  great  part  of  the  arid  areas  can  be  profitably  irri- 
gated, yet  their  estimates  are  so  extravagant  as  to  be  unworthy  a  moment's  consideration 
by  one  familiar  with  the  arid  regions,  one  such  estimate  being  that  200,000,000  acres  of 
these  wastes  are  susceptible  of  Irrigation.  The  utter  recklessness  of  such  an  estimate  will 
be  instantly  apparent  to  one  who  has  seen  much  of  the  arid  area  when  he  reflects  that 
such  areas  embrace  less  than  800,000,000  acres  and  that  this  estimate  contemplates  the  re- 
clamation of  one  acre  out  of  four,  when  it  is  very  doubtful  If  one  acre  in  thirty  can  be 
irrigated. 

If  there  are  35,000,000  acres  which  can,  after  providing  for  the  pasturage  of  a  due 
proportion  of  horses,  cattle  and  sheep,  be,  within  twenty  years,  brought  under  the  plow 
and  devoted  to  the  production  of  food  staples  our  population  will  have  so  increased  as  to 
require  the  product  of  every  such  acre,  as  well  as  the  10,000,000  now  employed  in  the  pro- 
duction of  food  for  exportation,  as  each  year's  addition  to  the  population  will  be  1,500,000 
or  more  and  consume  the  product  of  4,500,000  acres,  and  if  we  are  to  continue  the  exporta- 
tion of  tobacco  and  cotton,  in  anything  like  present  proportions,  it  will  be  necessary  to 
add  nearly  5,000  000  new  acres  annually  to  the  plowed  fields,  and  this  is  more  than  double 
the  area  now  being  added  if  the  reports  of  the  Agricultur.il  Department  are  any  criterion. 

Many  suppose  that  when  wheat  becomes  scarce  it  will  only  be  necessary  to  divert 
enough  of  the  meadows  and  corn  fields  to  its  production  to  meet  the  increased  require- 
ments, but  it  would  be  impossible  to  conceive  a  more  fallacious  idea,  as  there  exists  a  very 
close  and  delicate  relationship  between  population,  consumption  and  production,  and  the 
moment  the  proportions  of  this  relationship  are  disturbed,  either  by  a  change  in  the  ratio 
of  acreage,  a  reduction  or  increase  of  average  acreage  yield,  by  reason  of  more  or  less 
favorable  meteorological  conditions,  or  an  exacting  foreign  demand,  that  moment  prices 
will  oscillate  as  have  those  of  corn,  oats  and  wheat  during  the  last  two  years. 

As,  for  several  previous  years,  the  corn  acreage  of  1889  was  much  in  excess  of  do- 
mestic requirements,  and  the  season  being  exceptionably  favorable,  the  per  capita  supply 
was  nearly  35  bushels  against  requirements — domestic  and  foreign — of  something  less 
than  30  bushels,  and  the  result  was  a  large  surplus  with  prices  sinking  to  the  lowest  level 
known  since  the  civil  war. 

In  1890  climatic  conditions  were  the  reverse  of  those  of  the  previous  year  and  the 
aggregate  out-turn  of  corn  a  fourth  less,  the  result  being  scarcity,  high  prices  and  the 
sending  to  the  shambles  of  hecatombs  of  half-grown  cattle  and  swine  that  the  farmer 
lacked  the  corn  to  fatten. 

The  relationship  between  supply  and  demand  is  accurately,  if  unconciously,  adjusted 
by  the  farmer  as  he  devotes  his  land  to  such  products  as  bring  the  best  returns  and  when 
the  area  in  any  staple  is  reduced  below  the  needs  of  the  population  just  so  soon  the  price 
of  such  product  will  become  relatively  higher  than  that  by  which  it  has  been  displaced, 
hence  when  a  staple  so  important  as  wheat  becomes  scarce  and  high  in  price  so  will  ad- 
vance the  price  of  all  staples;  otherwise  all  the  land  would  gravitate  to  the  production  of 
the  more  profitable  one,  and  yet,  while  the  farmer  adjusts  his  crops  to  meet  a  growing  or 
lessemnir  demand  for  the  various  staples,  the  short  seller  of  the  Boardl  of  Trade  fixes  the 
price  a-*  which  such  nroducts  shall  be  sold. 


8  FOOD    AND    POPULATION. 


The  writer  is  not  aware  that  until  within  two  years  an  attempt  had  ever  been  made 
to  determine  the  proportion  of  land  required  in  each  staple  for  the  subsistence  of  a  given 
number  of  people  and  was  led  to  make  tentative  coniputatious  of  acreage  requirements 
per  capita  for  the  purpose  of  ascertaining  what  relation  the  domestic  consumption  of  each 
staple  bore  to  the  total  of  land  under  cultivation,  as  well  as  to  determine  liow  soon  the 
area  employed  in  the  production  of  food  for  exportation  would  be  required  to  supply  food 
for  home  needs,  and  has  been  able  to  ascertain  from  the  total  production  during  the  ninth 
decade— less  the  quantities  exported— that  the  yearly  requiremeuts  per  capita  for  domestic 
consumption  have  been  the  product  of  1.19  acres  of  corn,  .48  of  an  acre  of  wheat,  .39  of 
an  acre  of  oats,  .64  of  au  acre  of  hay,  .11  of  an  acre  of  cotton  and  .15  of  an  acre  in  rye, 
barley,  bucliwheat,  potatoes  and  tobacco  (to  which  should  be  added  .20  of  an  acre  for  the 
cotton  exported),  and  such  acreage  ratios  can  not  be  disturbed  without  afTecting  prices; 
except  as  relates  to  such  products  as  are  produced  in  excess  of  domestic  requirements,  and 
tlien  the  price  will  be  subject  to  change  as  the  relationship  of  such  product,  to  the  whole 
bread-oating  population,  is  affected  by  (he  world's  supply,  largely  irrespective  of  the  local 
supply,  as  has  so  often  been  the  case  with  wheat. 

If,  by  diverting  land  to  wheat,  we  should  reduce  the  corn  area  below  1.19  acres  per 
capita  the  price  of  corn  would  advance,  and  should  such  diversion  proceed  far,  or  be  long 
continued,  the  price  of  corn  would  become  relatively  much  higher  tlian  that  for  wheat,  as 
is  now  the  case  in  Argentina,  where  the  corn  crop  having  failed  wheat  and  maize  are 
being  sold  at  the  same  price  per  bushel,  when  the  i)arity  of  prices  is  about  two  and  a  half 
to  one. 

Having  a  surplus  acreage  in  corn  and  tlie  world's  very  deficient  wlieat  acreage  as- 
iuring  a  very  high  price  for  that  grain,  it  would  be  wise  to  divert  two  or  three  million 
acres  of  the  corn  land  to  wheat  for  a  year  or  so  and  thus  greatly  advance  the  price  of  corn, 
but  such  laud  must  revert  to  corn  not  later  than  1893  or  1S94  as  increasing  requirements 
are  such  as  to  absorb  the  product  of  1,800.000  additional  acres  of  corn  each  year  and  the 
surplus  corn  area  is  now  less  than  2,000,000  acres. 

When  this  surplus  acreage  has  been  absorbed  we  must  yearly  trench  upon  tlie  wheat 
fields  for  the  needed  additions  to  the  corn  area,  as  there  is  but  little  new  corn  laud  to  be 
brought  under  cultivation  and  wheat  is  the  ouly  staple,  other  than  corn  and  cotton,  of 
whieli  there  is  an  acreage  the  product  of  wliich  is  exported,  and  we  siiall  certainly  supply 
home  needs  before  attempting  to  furnish  Europe  with  either  bread  or  meat. 

Of  39,000,000  acres  in  wheat  1,000,000  have,  within  a  year,  been  taken  from  the  corn 
arL-a.  and,  as  in  1895,  we  shall,  for  domestic  consumption,  require  the  product  of  butabout 
34,1)00,000  acres  in  wheat  and  needing  to  add  1,800,000  acres  per  year  to  the  corn  area,  it 
would  appear  that  to  furnish  the  needed  corn  we  must,  before  1896,  have  taken  from  the 
wheat  area  the  5,000,000  surplus  acres,  hence  it  does  not  seem  likely  that  we  can  export 
any  part  of  the  .staple  products  of  our  fields  after  189.5  except  cotton  and  tobacco. 

Part  of  the  wheat  acreage  must  be  thus  diverted  or  the  domestic  consumption  of  all 
the  other  staples  be  reduced,  as  the  additions  to  the  acreage  are  so  far  from  meeting  the 
requirements  of  current  additions  to  the  population  that  the  entire  acreage  now  producing 
food  for  export  will  have  been  absorbed  by  domestic  consumption  within  five  years^ 
hence  it  follows  that  the  exportation  of  food  must  then  cease  or  we  must  lower  the  stand- 
ard of  living. 

That  tlie  arable  areas  of  Europe  are  very  fully  occupied  is  made  manifest  in  the 
table  showing  European  crop  acreages,  and  while  some  increase  of  the  cultivated  area 
may  be  expected  in  Eastern  Europe,  it  is  not  likely  to  more  than  keep  p.ace  with  local  re- 
quirements. Other  than  this  any  material  expansion  is  improbable.  Nor  can  tlie  meadows 
and  other  fields  be  diverted  to  wheat  production  without  causing  a  scarcity  of  products 
quite  as  necessary  and  which  have  beeu  displacing  wlieat  in  Western  Europe,  as  wheat 
would  better  bear  carriage  and  could  bo  more  readily  procured  from  abroad. 

lu  .South  America  are  large  areas  adapted  to  cereal  culture,  of  which  less  than 
5,000.000  acres  are  employed  in  growing  wheat,  and  about  the  same  area  in  other  crops, 
the  whole  of  temperate  South  America  having  less  laud  in  cultivation  than  has  Nebraska, 
and  this  region  will  have  made  quite  as  much  progress  as  can  be  expected  if  thocultivated 


FOOD   AND    POPULATION.  9 

»re:i  shall  have  beeu  doubled  by  1910.  as  the  social,  political,  fiscal  and  industrial  condi- 
tious  are  such  as  to  ensure  tard^'  developnsent.  This  regiou,  however,  has  the  distinction 
of  Ijeing  the  only  one  where  the  area  devoted  to  wheat  has  during  the  ninth  decade,  in- 
creased faster  than  domestic  lequirenieuts, 

Australasia  contains  much  gOi)d  wheat  land,  a  small  part  of  which  has  been  brought 
into  use,  but  since  ISSO  tlie  area  in  wheat  has  not  increased  as  rapidly  as  domestic  needs, 
the  acreage,  relatively  to  population,  having  diminished  nearly  five  percent,  and  the  total 
area  under  cultivation  still  more. 

InsufBcient  population  and  deficient  means  of  transportation  preclude  a  rapid  ex. 

tension  of  the  Australasian  wheat  area,  but  the  most  potent  cause  of  retardation  will 

probably  be  fouud  in  long  term  pastoral  least's  which  cover  vast  tracts  of  the  most  desira. 

ble  lands,  which  can  not  be  opened  for  cultivation  until  these  leases  expire,  heuce  there  is 

little  reason  to  expect  much  increaseof  wheat  exportation  from  Australasia  during  this 

century. 

We  get  a  clear  conception  of  the  relative  importance  of  Australasian  agriculture 

when  we  remember  that  the  total  area  under  cereals  and  potatoes,  in  all  the  seven  colonies 
is  but  5,190,000  acres  and  is  but  37  per  cent,  of  the  area  devoted  to  such  crops  in  the  State  ot 
Illinois,  and  the  cultivated  area  ol  the  whole  southern  hemisphere,  outside  of  the  tropics, 
is  less  than  that  of  the  one  State  named. 

The  cereal  contributions  of  India  cannot  increase  and  are  liliely  to  diminish 
rapidly,  as  the  population  is  increasing  more  than  one  per  cent,  per  annum  while  the  area 
under  cultivatiun  increases  not  one-third  as  fast  and  is  not  capable  of  much  expansion 
while  the  agricultural  population,  other  than  that  of  Bengal  (where  the  Indian  govern- 
ment has  not  the  power  to  increase  the  land  tax  owing  to  a  permanent  settlement  had 
in  1793),  are  constantly  in  a  state  of  semi-star vation. 

The  Indian  wlieat  area  has  shown  no  increase  in  twenty  years,  and  there  are 
thoughtful  citizens  of  India  who  anticipate  the  early  cessation  of  exports  from  the 
necessity  of  devoting  the  entire  product  of  the  fields  to  the  subsistence  of  a  population 
increasing  about  3,000,000  yearly,  and  that  requires,  even  at  the  miserable  Indian  stand. 
ard  of  living,  the  addition  of  nearly  2,000,000  new  acres  per  annum. 

The  political,  social  and  industrial  conditions  environing  the  populations  of  Algeria, 
Tunis  and  Morocco  preclude  any  material  expansion  of  wheat  culture  in  Northern 
Africa  at  an  early  day  and  similar  conditions  obtaining  in  the  Asiatic  dependencies  o' 
Turkey,  no  considerable  additions  to  the  wheat  supply  may  be  loolied  for  in  that  direc- 
tion, while  in  Egypt  the  culture  of  wheat  is  being  slowly  displaced  by  that  of  sugar,  cot- 
ton and  the  cheaper  foods  required  by  an  augmenting  population. 

Siberia  and  North  s-estern  Canada  remain  as  sources  of  possible  supply,  yet  neither 
possesses  the  requisite  population  for  an  early  increase  of  wheat  production  on  a  scale  at 
all  commensurate  with  the  world's  pressing  needs. 

There  seems  no  doubt,  however,  that  in  Siberia  is  an  immense  area  suited  tocoloniza- 
ti.in  and  the  production  of  cereals,  but  political  apd  social  conditions,  as  well  as  the  tenure 
of  the  land,  are  such  as  to  render  it  quite  probable  that  it  will  not  soon  become  an  outlet 
for  the  swarming  European  populations,  other  than  those  of  Russia  and  the  develop. 
n:ent  will  be  so  slow  as  to  afford  little  hope  as  to  the  supplies  from  this  source  beingof  tha 
nquired  volume. 

It  is  contended  that  there  exists  in  Northwestern  Canada  an  extensive  region 
adapted  to  the  profitable  culture  of  cereals.  While  the  fertility  of  much  of  this  region  ig 
o-  questionable  it  is  practically  unoccujiied,  without  the  means  of  trauspi>itation  and  ita 
adaptation  to  wheat  culture  still  but  liypothetical,  as  there  has  been,  over  the  most  of  thia 
■vide  area,  no  such  contiuued  culture  as  to  dispel  reasonable  doubts  (arising  from  its  geo- 
jraphical  situation)  as  to  the  summer  lieats  being  ordinarily  sutBcient  to  rijien  wheat. 
But  for  this  doubt  we  might  say  that,  when  occupieil.  Northwestern  Canada  would  add 
materially  to  the  world's  supply  of  bread,  but  existing  conditions,  as  to  population  and 
transportation,  are  such  that  no  material  relief  from  the  scarcity  now  impending,  lay 
reason  of  the  existing  and  prospective  deficient  wheat  and  rye  acreage  of  the  world,  can 
be  hoped  for  from  this  source  as  time  is  such  an  important  element  in  the  problem.     A 


10  FOOD    AND    POPULATION. 

hungry  man  can  not  wait  for  his  breakfast  until  an  unoccupied  region  can  be  peopled  and 
its  lands  subdued,  and  to-day  the  world  is  not  only  short  in  bread-stuff  by  reason  of  defi- 
cient acreage,  but  the  great  disaster  which  has  befallen  the  growing  crops  of  Europe, 
coupled  with  the  deficient  acreage,  render  it  reasonably  certain  that  the  yield  of  the 
world's  wheat  and  rye  fields  in  IfiiU  will  be  le^is  than  current  needs  liy  hundreils  of  millions 
of  bushels  and  that  the  last  vestige  of  the  reserves,  aecumulated  during  the  e.\isten<e  of  a 
surplus  acreage,  will  have  disappeared  and  an  unpleasant  void  still  remain,  and  this  con- 
dition should  ensure  very  high  prices  for  our  products,  and  once  the  pinch  is  felt  in  con- 
sequence of  the  exhaustion  of  the  reserves,  prices  should,  and  will,  remain  high  while 
the  acre;ige  deficit  exists,  and  that  it  will  long  exist  is  assured  by  the  scarcity  of  available 
lands  in  the  termperate  zones. 


THE  EXHAUSTION  OF  THE  AEABLE  LANDS. 

Nearly  twenty  years  since,  Gen.  W.  B.  Hazen  pointed  out  the  approaching  ex- 
haustion of  the  arable  lands  of  the  United  States,  and  was  sharply  criticised  for  certain 
statements  as  to  the  aridity  and  unfitness  for  agriculture  of  the  lands  west  of  the  100th 
meridian.  Time  and  repeated  attempts  to  subject  such  lands  to  cultivation  have  shown 
the  correctness  of  Gen.  Hazeu's  statements  and  conclusions.  A  little  more  than  a  score 
of  years  since,  Iowa,  Missouri,  Kansas,  Nebraska  and  the  Dakotas  constituted  a  vast  dis- 
trict but  sparsely  settled,  the  area  then  in  cultivation  in  those  States  being  but  little  more 
than  seven  million  acres;  now,  however,  by  the  opening  of  new  farms  and  the  develop- 
ment of  older  ones,  the  area  in  staple  crops  (in  such  States)  is  much  more  than  one-fourth 
of  all  the  lands  in  the  United  States  so  employed.  With  such  an  area  of  the  most  fertile 
soils  in  the  process  of  development  it  is  not  strange  that  Gen.  Hazeu's  views  were  looked 
upon  as  pessimistic;  yet  their  correctness  can  no  longer  be  questioned. 

The  writer  has  recently  shown  that  the  existing  depression  in  agriculture  is 
due,  in  part,  to  an  excessive  development  of  these  fertile  districts;  that  agriculture  and 
all  related  industries  can  be  prosperous  only  wheu  consumption  balances  production;  and 
that  an  early  equilibratiou  is  assured  by  the  growing  scarcity  of  tillable  lands.  Investi- 
gations, undertaken  solely  with  the  view  of  ascertaining  why  the  farmer  was  not 
prosperous,  led  irresistably  to  the  conclusion  that  the  rapid  increase  of  the  cultivated  area 
in  the  United  States  was  one  of  the  causes  of  the  lack  of  prosperity  among  the  farmers  of 
Canada  and  Europe,  as  well  as  of  the  United  States,  and  that  the  great  reduction  in  the 
yearly  accretions  to  such  cultivated  acreage  was  a  sure  presage  of  the  early  coming  of 
the  time  when  the  farmer  will  be  prosperous.  Further  investigations  have  developed  the 
fact  tliat  the  arable  lands  are  being  occupied  at  a  rate  which  insures  their  complete  ex- 
haustion at  a  much  earlier  date  than  has  heretofore  been  deemed  possible,  with  rapid 
reduction  in  the  volume  of  exportable  breadstutl's,  and  an  entire  and  not  remote  cessiifion 
of  such  exports,  probably  to  be  followed  by  our  entering  the  markets  of  the  world  for  a 
portion  of  the  wheat  required  for  domestic  consumption. 

To  understand  the  situation  clearly,  it  is  best  to  resort  to  tabular  statements  show- 
ing the  increase  in  cultivated  acres  in  diflerent  districts  during  designated  periods,  the 
rate  of  increase  in  each  district  in  such  periods,  the  aggregate  of  the  additions  to  the  cul- 
tivated acreage  in  each  period,  the  yearly  average  of  such  additions  for  each  perioil,  the 
percentages  o^  such  increase  for  each  period  as  well  as  the  yearly  average  of  such  percent, 
ages,  and  a  comparison  of  the  periodical  rate  of  increase  of  acreage  with  that  of  popula- 
tion.    This  is  shown  in  the  following  table: 


THE  EXHAUSTION  OF  THE  ARABLE   LANDS. 


11 


s 

< 

2 
a 

•6881  Ol  I  s<tr 

t-;  s:  —  «     -1<     00 

i^  CD  C-i  00     ^     o 

00 

f-H 

CD 
1-i 

0 

^2=2    §    g 

lO  cd"  :r^  -  r  c^   i> 

Ol  o  o  - 

O 
O 

O 

o" 
o 

55 

i 

o 

CD 

CO 
CJ 

o" 

CO 

S 

> 
3 

o 

gs-noj.^uj  jo 

CO  f  «  t*-      CC      CO 

o  c-i  iO  ci    —    ^ 

r-^  -T  ^    (>1    cr; 

C-J 
CI 

CI 

CJ 

o 
a" 

^  ■>!  Tt<  CO     CO     :o 
(>j  O  :c  »o     I-     O 
OJ  -^  1-  05      O      CO 

^"rfcooT  oT   of 

CO  — '  lO  r-       .-.       CD 
CC   J5_C;   r-t       IC       CO 

CD 

cd" 

1- 

g 

o 

CJ 

55 

o 

o 

o" 
o 

o 

40 

CD 
CO 

00 
CO 

<3 

< 

■a 
2 

d 

■      > 

o 

6i8'  01  fifl 

OSBajDUI  JO 

sasuiuaajo^i 

CO  CM  ^  CO     l>     CD 
lO  cf  'Tii  lo     o\     o 
tri  C-)  00  ■<*<    CO    c-J 

o 
ci 

CI 

00 

s. 
g 

a 
5 

oo  r^05    o    CO 

O  —  CD  lO     O      t^ 
0_  ^105-^1^     0_     CO 

O  iC  CO  :C     "O     o 
CC  O  CO  lO     C-I     lO 
lO  r^  -f  X"    ^    ^" 
<M  T^  so  -f 

S3 

I— 1 

o 

CD 
1— 1 

00 
lO 

oo" 

CI 

CD 

8 

o 

CD 
00 

o 

< 

2 
1 

9SHSJDUI   pnE 
,0S«3JD3a  JO 

O  O  CO  lO     "M     GO 

t-^  C75  .-^  -^     Oi     oi 
«  ^  iC  '-'               00 

*        ^ 

cq 

CO 

03 

ci 

s, 

2 

02 

^  05  ^  CO      CD      ^ 
O  —  CC  "Xi      I~     -^ 
CI  ^  00  --      CO^     CI 

lo"  r-^  00  gT   c-f   CO 

en;  i^  (X;  -tT     1--     CO 
O  fM  CO  CO      C-l      t' 

o  t^x  CO       c<r 

Cq  CC^  CO 

CD 

« 

CI 

f-» 

8 

o 

CD 

a-j 
t^ 
cf 

I-- 

■^ 

CJ 

cj" 

Cultivated 

Area  In 

Staple  Crops 

1867 

05  ^H  00  C5      Ci      O 
1-  -^  C^l  "^      lO     O 
CD  M  Oi  C  1^     -rr      O 

CD"^3i'io"    ccT    O 

O  CO  - 1  c^l    CO     r- 

CJ  CO  ^  ■— (     c^     c:i 

C4  CO         C^l 

CD 
CJ 
lO 
CO- 

-r 

CC 

■^' 

o 

o 

CD* 

£5 

O  C:  ^  00     O     OO 
CO  O  lO  -:»*     -^      CD  O 
CO^CO_M_Oi_     0_     ^CD 
co'^'oTTf"    1^    -rjT^ 
CO  C30  CO  05      "^      CD  00 

t^  ::o'"-f'cf    CO    cd"-^ 
1—  O  t^  CI     »o     o  -v 
I-.  ri  CI  U3    o    c^ 

i 

1 

•3 

s 
o 

o 

4- 

c 

oi 

:  > 

is 
:  > 

:  'i- 

h3i 

a 
X 

a  ^  S 

3    4;    C 

> 

2 

a 

s 

-S 

a 

> 

e 
c 

03 
> 

■= 

c 

i 

c3  cj  □ 

HI 

Hi 

—  ^  o  p,  rt 

O  S  cS  cn 

0)  >.  o  a  01 
>  c^  OS  OS  w 

< 

li 

"3 

IS 

1— I 

h3 

a 

3 
O  m 

«  o 

n 

s: 

©■aj: 

-as 

^ 

-  --e  a 

o 

^S« 

"a 

•=«  a 

Tl 

°5 

V  C4 

cS 

a« 

.a* 

rt 

Ti-a 

a  a 

0 

rt  ca 

a  =8 

•^jjj 

c  a 

rt 

OJO 

s 

>2; 

s 

•H« 

«i  0 

Ci 

•ss 

f 

"rtl 

ca 

hS 

;?i 


§ 

H 

rt 

*-> 

> 

< 

\-o 

£^i 

% 

i£ 

5^ 

J 

^ 

The  preceding  exhibit,  covering  twenty-two  years  of  greatest  expansion  in  American 
agriculture,  is  divided  into  four  periods,  the  lirst  being  seven  years  and  eacli  of  the  others 
five.  In  the  seven-year  period,  population  is  found  to  have  increased  18.2  per  cent,  and 
the  cultivated  area  20.2  per  cent.;  the  drafts  upon  the  arable  lauds,  in  the  shape  of  addi. 
tiuus  to  the  acreage   in   staple   crops,   amounting  to  2,724,177  acres  per  annum,  and 


12  THE  EXHAUSTION  OF  THE  ARABLE  LANDS. 

aggregating  19,069,238  acres.  During  the  second  peroid — five  years — population  increased 
14.2  per  cent,  and  the  area  in  cultivation  42  per  cent.,  the  average  annual  additions  to  th» 
cultivated  area  being  no  less  shan  9, .525, 710  acres,  and  aggregating  47,628.548  acres.  The 
third  period  shows  population  increasing  a  trifle  more  than  12  per  cent.,  cultivated  acres 
21.2  per  cent.,  and  an  average  annual  addition  to  the  area  in  staple  crops  of  6,841,661  acres; 
the  aggregate  reaching  34,208,307,  which  was  still  out  of  proportion  to  the  increase  in 
population.  During  the  five  years  ending  in  1889,  the  rate  at  which  population  increased 
was  somewhat  less  than  in  the  preceding  periods,  but  the  rate  of  increase  in  cultivated 
acres  was  reduced  to  8.1  per  cent.,  being  but  1.6  per  cent,  per  annum;  the  average  annual 
increment  of  the  cultivated  area  shringiug  to  3,150,276  acres — little  more  than  half  the 
normal  requirements— and  clearly  showing  the  rapid  diminution  of  the  arable  lands. 

Although  the  population  was  12.200,000  greater  in  1889  than  ten  years  earlier,  and 
the  desire  for  farms  just  as  keen  as  ever,  yet  in  the  last  five  years,  with  fully  a  fourth 
more  people  desirous  of  becoming  owners  of  farms,  the  number  of  acres  added  to  the  cul- 
tivated area  was  but  one-third  as  great  as  during  the  five  years  ending  in  1879;  being  in 
the  latter  period  15,750,000  acres,  as  against  47,628,000  acres  in  the  earlier  one;  whereas, 
had  the  increase  in  acreage  been  in  the  same  ratio  to  population  as  in  the  earlier  period, 
such  additions  would  have  reached  a  total  of  60,000,000  acres.  The  land  hunger  being 
quite  as  sharp  now  as  in  the  eighth  decade,  it  is  evident  that  there  is  a  lack  of  the  means 
of  gratifying  it. 

The  foregoing  table  and  the  partial  analysis  following  enable  us  to  see  the  progress 
of  agricultural  development  and  the  occupation  and  gradual  diminution  of  the  arable 
areas  in  the  several  districts.  They  help  to  a  clearer  appreciation  of  the  effects  of  such 
rapid  development  upon  the  agricultural  and  other  Interests  and  indicate  plainly  that 
the  existing  depression  is,  in  part,  due  to  an  increase  in  cultivated  acres  out  of  all  propor- 
tion to  the  synchronous  increase  in  population,  at  the  same  time  suggesting  the  inquiryi 
Wliere  can  be  found  the  arable  lands  to  satisfy  the  land-hungry  home-seekers  now  ready 
to  settle,  in  countless  swarms,  upon  any  fraction  of  an  Indian  reservation  that  is  at  al* 
likely  to  be  thrown  open  to  settlement? 

The  unoccupied  area  in  the  North  Atlantic  group  covers  some  7,500,000  acres.  It 
lies  mostly  in  the  Aroostook  and  Adirondack  regions,  and  is  almost  wholly  unfit  for  cul- 
tivation being  either  rough  and  mountainous,  swampy,  or  heavily  timbered,  with  soils 
of  very  low  fertilit3',  of  which  but  a  small  fraction  can  be  brought  under  cultivation.  In 
Michigan,  Wisconsin  and  Minnesota  are  tracts  aggregating  some  10  000,000  acres  which 
are  valuable  only  for  the  forest  growths  above  and  the  minerals  below  the  surface.  These 
lauds  will  add  but  little  to  the  cultivated  acreage. 

Such  portions  of  Texas,  Kansas.  Nebraska  and  the  Dakotas  as  lie  west  of  the  100th 
meridian  have  generally  been  included  among  the  arable  areas,  and  it  has  been  esteemed 
an  act  of  treason  for  a  citizen  of  any  one  of  those  States  to  maintain  that  only  such  parts 
of  this  vast  tract  as  are  susceptible  of  irrigation  can  rightfully  be  so  designated.  This 
Immense  plains  area,  covering  as  well  large  parts  of  New  Mexico,  Colorado,  Wyoming 
and  Montana,  is  at  best  but  a  pastoral  region,  in  which  repeated  attempts  have  been  made 
to  reduce  the  lands  to  cultivation.  Successive  armies  of  settlers  have  invaded  these 
desiccated  plains,  but  after  expending  their  means  and  suffering  deplorable  hardsliips, 
have  found  it  necessary  to  abandon  land  and  improvements.  This  is  the  area  from  which 
arises  that  perennial  cry  for  aid,  as  it  is  also  the  land  from  which  a  refluent  wave  of  pop- 
ulation moves  eastward  with  as  much  regularity  as  the  return  of  Autumn. 

Much  of  the  soil  being  fairly  fertile,  these  plains  offer  no  obstacles  to  settlement  and 
cultivation,  except  such  as  are  found  in  the  climate;  that  presents  the  same  peculiarities 
of  aridity,  extreme  variations  in  temperature  and  excessive  evaporation  found  in  the 
elevated  regions  of  Central  Asia.  It  is  true  that  near  the  eastern  borders  of  this  tract  fine 
crops  are  occasionally  grown,  but  only  in  years  when  the  rainfall  is  exceptionally  great 
and  the  dreaded  simoom  fails  to  wither  vegetation.  Such  exceptional  seasons,  however, 
are  but  "a  snare  and  a  delusion,"  inducing  men  to  waste  their  energies  and  means  in 
abortive  attempts  to  cultivate  these  arid  soils.    Occasionally  thearid  features  of  theclimat© 


THE  EXHAUSTION  OF  THE  ARABLE  LANDS.  1$ 

of  the  plains  are  projected  several  deo-rces  eastward,  sometimes  reaching  Missouri  and 
Arltansas,  with  disastrous  results  to  the  husbandman. 

Could  water  for  irrigation  be  ol)tained,  much  of  the  plains  region  could  be  made 
productive;  but  most  of  the  streams  penetrating  it  are  even  now  yearly  drained  dry  by 
irrigating  canals,  which  supply  water  to  irrigate  l)Ut  the  smallest  fraction  of  tliese  im- 
mense areas  During  the  seasons  of  18S7,  18S8,  188!)  and  1890  (aud  nearl>  every  year  of 
late),  many  miles  of  sucli  canals  remained  dry  during  the  entire  Summer,  owing  to  the 
complete  appropriation  of  the  water  by  canals  opening  from  such  streams  nearer  their 
source.  In  seasons  of  excessive  droutli  and  delicic^iit  snowfall  the  water  available  is 
lessened  one-half  or  more;  hence  irrigation  from  the  water  (lowing  in  such  streams  has 
about  reached  its  limit.  This  is  notably  true  of  the  Platte,  Arkansas,  Cimarron  and  Rio 
Grande. 

Many  schemes  have  been  proposed  for  utilizing  the  water  said  to  flow  below  the 
sand  in  the  valleys,  but  snch  projects  involve  immense  outlays,  are  as  yet  unfruitful,  aud, 
it  is  generally  believed,  will  long  remain  so.  .Should  such  plans,  however,  ultimately 
prove  successful,  the  resulting  supply  would  suflice  to  irrigate  but  an  inconsiderable  frac- 
tion of  the  arid  lands,  being  rarely  applicable  outside  the  immediate  vicinity  of  the 
streams. 

Extending  from  the  Gulf  to  far  north  of  the  Canadian  bouudary,  aud  from  the 
vicinity  of  the  lOOtli  meridian  to  the  Eocky  Mountains,  the  plains  embrace  an  area  of 
hundreds  of  milltous  of  acres,  of  which  probably  one-fourth,  with  sulBcient  water  for 
irrigation,  could  be  made  productive;  but  under  existing  conditions  it  is  very  doubtful 
if  three  per  cent,  should  be  included  under  the  term  arable,  aud  such  arable  part  is  nearly 
or  quite  all  occupied,  even  though  a  part  of  it  is  unimproved. 

Lying  west  of  the  plains  is  the  still  mOre  arid  region  of  the  mountaiu  ranges  and 
plateaus,  where  are  found  numerous  fertile  valleys,  mostly  of  limited  extent,  which, 
when  not  at  too  great  an  elevation,  and  when  supplied  with  water  for  irrigation,  are  very 
productive;  yet  in  such  favored  localities  occur  seasous  of  excessive  drouth,  wheu  the  sup- 
ply of  water  (resulting  mostly  from  melting  snow)  proves  wholly  inadequate  for  the 
limited  acreage  under  cultivation,  as  was  the  casein  Nevada,  Utah,  and  other  arid  dis- 
tricts in  1887,  1888,  1889  and  1890. 

The  regions  where  irrigation  is  a  condition  precedent  to  successful  agriculture  in- 
clude an  area  of  some  784,000,000  acres,  of  which,  owing  to  scarcity  of  water  and  laclc  of 
soil,  not  more  than  five  per  cent,  is  susceptible  of  cultivation;  and  there  is  no  satisfactory 
evidence  that  water  can  be  obtained  to  irrigate  the  half  of  five  per  coot.  The  construc- 
tion of  extensive  irrigation  works  necessitates  the  expenditure  of  much  money  and  takes 
long  periods  of  time,  and  few  of  those  now  living  will  see  the  completion  of  such  works 
as  will  be  required  to  irrigate  the  30,000.000  acres  of  arid  lands  which  the  Public  Land 
Commission  estimates  as  irrigable  from  existing  supplies  of  water. 

In  adopting  the  estimate  of  the  Public  Land  Commission,  that  but  30,000,000  acres 
of  the  arid  lands  are  irrigable  from  the  available  supply  of  water,  I  am  not  unmindfulof  the 
fact  that  such  estimate  couflicts  with  tliat  recently  made  public  by  Major  Powell*  (who 
was  a  member  of  the  Public  Land  Commission)  namely,  that  "there  are  nearly  1,000,- 
000,000  acres  of  these  arid  lands  in  the  United  States,  of  which  nearly  120,000,000  acres 
can  be  irrigated  when  all  such  waters  are  used." 

I  am  unable  to  accept  such  an  estimate  for  many  reasons,  one  of  which  is  found  in 
the  fact  that  the  arid  areas  include  something  less  than  800,000,000  acres,  or  less  than  80 
per  cent  of  the  1,000,000,000  acres  named  by  Major  Powell. 

Nearly  or  quite  all  those  familiar  with  the  arid  regions  consider  the  estimate  of  the 
Commission,  that  one  acre  in  twenty  is  susceptible  of  irrigation,  quite  as  high  as  the  facts 
warrant;  and  it  should  be  borne  in  mind  that  most  of  the  arid  lands  which  could  be 
easily  and  cheaply  irrigated  have  already  been  brought  under  the  plow,  yet  less  than  one 
per  cent,  of  the  area  is  in  cultivation. 

Before  any  considerable  additions  can  be  made  to  the  irrigated  lauds  extensive 
♦"Century  Magazine.''  Muicli,  1890. 


14  THE  EXHAUSTION  OF  THE  ARABLE  LANDS. 

surveys*  must  be  made;  existiiiR  eliiims,  water  rights,  ami  titles— inchoate  and  complete 
— extinguished;  national  and  State  laws  fornnilated  and  enacted  tluit  will  harmonize  or 
extinguish  conflicting  national,  State,  municipal,  corporate  and  individual  Interests;  and 
then  extensive  and  costly  works  constructed — all  of  which  will  consume  much  time.  In 
the  interim,  population  and  consumption  will  have  outrun  production,  the  small  remain- 
der of  the  unoccupied  non-irrigable  arable  lands  will  have  disappeared,  and  such  portions 
of  the  arid  districts  as  can  be  brought  under  the  plow  will  be  needed  to  meet  the  urgent 
wants  of  an  ever  increasing  consuming  element. 

The  processes  and  progress  of  agricultural  development  in  prairie  regions  where 
rains  are  ordinarily  sutHcieut,  and  in  mountain  districts  where  arable  lauds,  susceptible  of 
irrigation,  exist  only  in  tracts  of  small  extent,  differ  most  radically,  as  is  evident  wlien 
the  progress  made  in  Nebraska  and  Kansas  is  contrasted  with  that  made  in  Colorado  and 
Utah.  Utah  has  been  settled  more  than  forty  years;  Colorado,  Nebraska  and.  Kansas 
from  thirty  to  thirty-five  years.  In  1888,  Colorado  bad  5'i0,000  acres  employed  in  growing 
staple  crops;  Utah,  396,000;  Nebraska,  8,141,000;  and  Kansas  10,552,000;  the  cultivated 
area  in  Kansas  being  twelve  times  that  of  Colorado  and  Utah.  Had  any  considerable 
part  of  the  lands  of  the  mountain  districts  been  arable  and  susceptible  of  irrigation,  they 
would  long  since  have  been  seized  upon  for  farms  by  the  great  army  of  the  landless. 

The  uneultivable  character  of  the  lauds  of  plain  and  mountain  <listricts.  and  the 
rajiid  diminution  of  the  unoccupied  arable  soils  of  the  United  States,  have  been  clearly 
shown  by  the  events  following  the  opening  to  settlement  of  the  limited  and  not  over-fertile 
Oklahoma  country,  :vhen  men  who  had  failed  to  find  satisfactory  locations  in  California, 
Oregon  and  Washington  retraced  their  steps,  hoping  to  secure  land  upon  which  to  found 
a  home,  only  to  find  in  advance  of  them  an  army  of  would-be  settlers  large  enough  to 
occupy  a  territory  ten  times  the  size  of  Oklahoma.  Similar  scenes  have  more  recently 
been  enacted  upon  the  opening  of  a  part  of  the  Sioux  reservation,  where  a  Itmd-hungry 
myriad,  in  the  depth  of  a  Dakota  Winter,  contended  for  the  possession  of  lauds  wholly 
within  the  belt  where  the  farmer  must  strive  with  drouth  and  a  soil  below  the  average  in 
fertility. 

While  I  write,  an  army  of  settlers  is  camped  along  the  southern  Kansas  border, 
Impatiently  waiting  a  proclamation  from  the  President— which  may  not  come  for  many 
mouths — opening  to  settlement  thegood,  bad  and  indiflerent  lands  of  the  Cherokee  Outlet; 
which  body  of  land  will  probably  furnish  some  20,000  fair  to  good  farms  of  IGO  acres  each, 
and  a  like  number  that  will  not  pay  for  cultivation;  the  remaining  16,000  quarter  sections 
being  fit  only  for  pasturage,  and  much  of  it  of  little  worth  for  that  purpose.  These 
Btateuients  will  not  be  chalenged  bj'  tho.se  familiar  with  that  country,  unless  they  are  en- 
gaged in  "booming"  the  district  in  question. 

In  California,  as  well  as  in  the  States  of  the  Missouri  valley,  there  is  much  laud  ye' 
unoccupied,  mostly  in  the  possession  of  corporations  and  individuals  who  are  holding  It 
for  Henry  George's  "unearned  increment."  These  lands  are  likely  to  be  brought  into 
cultivation  very  tardily,  and  in  such  a  manner  as  to  add  but  little  to  the  area  in  grain 
crops,  as  they  will  no  more  than  replace  lands  diverted  from  cereal  culture  to  pasture  and 
meadow — a  diversion  necessitated  by  the  constantly  increasing  number  of  animals  kept. 

In  Oregon  and  Washington  are  great  unoccupied  areas.  Such  portions  of  these 
unoccupied  lauds  as  lie  east  of  the  Cascade  Mountains — say  two-thirds  of  each  State- 
possess  many  of  the  characteristics  of  other  mountain  districts.  Such  small  portions  of 
western  Oregon  and  Washington  as  are  without  timber  have  long  been  occupied,  while 
the  remainder  of  these  fertile  districts  is  so  heavily  timbered  as  to  render  such  lands  uu- 
uvailable  as  a  source  of  food  supply  during  this  century. 

Far  at  the  southeast,  in  Florida,  is  found  an  immense  unoccupied  area — some  12,- 
000,000  acres  or  more — but  this  region  is  a  land  of  sand-barrens,  impassible  swamps,  dense 
forests  and  everglades,  little  of  which  is  fit  for  human  habitation.  Long  as  Florida  has 
been  .settled,  and  though  by  reason  of  possessing  the  ad  vantages  of  a. semi-tropical  climate 
it  has  become  the  Winter  abode  of  so  many  well-to-do  people,  it  shows  but  little  agricult*- 

•Major  Powell  proposes  four  different  surveys  -  topographic,  li.vdrocrapliic,  engineering  aod  geo- 
lo^flcal  — wliich  will  certainly  require  several  decades  to  complete,  and  which  will  cost  vast  suDia. 


THE  EXHAUSTION  OF  THE  ARABLE  LANDS.  15 

ur:il  liovelopiueut  doubtless  Ijpeause  of  the  sterility  ami  uncultivable  character  of  a  ^reat 
part  of  the  laiicU.  The  result  is  that,  aside  fmiu  tlie  area  ejiiploycd  iu  growing;  fruits  ;ind 
vegetables,  less  tliau  three  per  cent,  of  the  surface  of  the  Stale  is  iu  eultivatiou.  With 
Buch  a  showing,  it  is  clear  that  Florida  will  niaUe  no  material  additions,  at  an  early  day, 
to  the  area  employed  in  growing  staple  emits. 

Scattered  through  the  southern  States  are  many  unoccupied  tracts;  but  of  thei-e 
only  a  small  part  can  be  designated  as  arable,  for  much  of  such  laud  is  swamp,  moun- 
taiu  or  subject  to  overflow;  this  being  especially  true  of  such  remnants  of  the  public 
domain  as  are  still  to  be  found  iu  the  southern  districts.  Still  we  are  likely  to  see  some 
extension  of  the  cultivated  area  iu  southern  States,  more  especially  io  Arkansas  and 
Texas;  there  lieiug  in  those  States  much  unimproved  land  iucluded  in  farms  which  will 
hereafter  be  reduced  to eultivalion  and  used,  largely,  to  augment  the  world's  supply  of 
cotton. 

In  the  Indian  Territory  is  found  the  only  large  body  of  fairly  fertile  lands  yet  to  be 
brought  into  cultivation.  The  area  of  that  Territory  is  44,481,000  acres,  the  eastern  two- 
thirds  of  which  possess  a  soil  of  average  fertility,  while  the  remaiuder  is  much  below  the 
average.  The  peculiar  climatic  conditions  of  the  arid  plains  are  frequently  pjojecled  over 
the  western  portion,  reudej'iug  mixed  farming  but  a  precarious  means  of  subsistence. 
Various  tracts  in  the  Territory  will  be  opened  to  settlement  from  time  to  time  as  the 
Indian  titles  are  extinguished;  but  it  will  be  mostly  in  the  western  and  by  far  the  poorer 
part,  for  the  eastern  and  better  soils  will  for  a  long  time  remain  in  the  possession  of  the 
Indians  and  "squaw  men."  The  Indian  and  his  white  son-in-law  and  tenant  now  culti- 
vate much  laud  (possibly  500,000  to  1,000,000  acres),  of  which,  as  early  as  1880,  a  large 
proportion  was  iu  cotton.  Within  the  last  year,  10,000  bales  of  cotton  were  shipped  from 
one  station.  Although  the  products  of  the  Indian  Territory,  for  reasons  known  only  tc 
the  Departmental  barnacles,  are  not  included  in  the  reports  of  the  Department  of  Agri- 
culture, yet  they  enter  into  consumption  aud  make  some  additions  to  the  marketable 
suri)lus;  and  this  acreage  will  in  time  appear  in  the  reports  probably  as  currentadditions 
to  the  area  in  staple  crops. 

The  foregoing  table  and  text  afTord  a  reasonable  basis  for  an  estimate  of  the  landi 
that  can  be  added  to  the  cultivated  area  within  a  given  period,  say  during  this  decade. 
But  before  proceeding  to  make  such  estimate,  it  may  be  well  to  inquire  what  the  Publio 
Laud  Commission  bad  to  say  on  this  subject  iu  its  report  for  1880,  wlierein  it  was  esti- 
mated, June  30,  1879  "that  (exclusive  of  certain  lands  iu  the  southern  States)  of  lands 
over  which  the  survey  and  disposition  laws  had  been  extended,  lying  in  the  West,  the 
United  States  did  not  own,  of  arable  agricultural  lands  which  could  be  cultivated  without 
Irrigation  or  other  artificial  appliances,  more  than  the  area  of  the  State  of  Ohio,  viz; 
25.000,000  acres  " 

"Of  the  public  domain  then  remaining  the  Commission  made  the  following  estimatei 

Timber  lauds 85,000  Ono  acres. 

Coal  lands  (to  be  largely  increased  by  better  classification o, 529, 000     " 

Mineral  lands  (subject  to  a  large  increase  by  new  discoveries) 64,800,000    " 

Arable  lands  in  northern  States  and  Territories 17,800,0('0     " 

Lauds  in  southern  States   surveyed  and  unsurveyed 25,589  000     " 

Irrigable  lands,  being  the  lands  which  can  lie  irrigated  from  the  present 

supply  of  water 30,000  000     " 

The  remaiuder  pasturage,  gi  i/.ing,  desert,  and  all  other  lands  useless 
for  agricultural  pmp.  -  's  by  reason  of  altitude  or  lack  of  water  or 
soil,  including  lemaiuder  of  lands  likely  to  be  segregated  for  pri- 
vate land  grants  still  unsatisfied,  and  Indian  and  military  reserva- 
tions, including  also  unsurveyed   area  of  the   Indian  Territory, 

viz:  17,150,250  acres .' 565,701,222     "  " 

An  analysis  of  this  estimate  will  show  that  of  the  public  domain  unoccupied  iu 
1880,  there  were  then  some  lOi)  000,000  acres  which  might  be  included   under  the  designa- 
tion .'iruble.  and  made  up  as  follows: 
17,800,000  acres  of  arable  lauds  in  northern  .States  and  Territories. 
7,000,000     "      in  southern  States. 
80,000  000    "      of  irrigable  lands. 
17,000,000     "       in  Indian  Territory. 
28,000,000    "      of  surrendered  railway  grants,  and  Indian  and  military  leservatious. 

100.800.000  acres  total. 


16  THE  EXHAUSTION  OF  THE  ARABLE  LANDS. 

Since  ISSO,  more  than  60,000,000  acres  of  these  lands  have  been  occupied  and  largely 
Orought  into  use,  and  the  only  unoccupied  remainder  of  any  moment  is  found  in  the 
lands  of  the  Indian  Territory,  and  in  that  portion  of  the  widely  scattered  irrigable  lauds 
yet  unsettled,  the  available  total  of  which  cannot  exceed  40,000,000  acres,  and  is  probably 
much  less;  and  these  lands  are  so  conditioned  that  development  must  be  slow.  To  these 
40.000  000  acres  may  be  added  an  indefinite  quantity  of  railway,  school,  college  and  State 
lauds,  much  of  which  is  wholly  unfit  for  cultivation.  Estimatingwith  extreme  liberality, 
ihe  arable  portion  of  these  lands  may  be  put  at  30,000,000  acres;  then,  adding  30,000  000 
icres  more  as  the  undeveloped  arable  lands  novc  constituting  parts  of  farms,  or  yet  uu- 
jccupied  lands  owned  by  individuals,  we  have  a  possible  total  of  100,000,000  acres  yet  to 
oe  brought  into  use,  equivalent  to  650,000  farms  of  160  acres  each. 

Of  the  farm  areas  included  in  the  census  of  1880,  thirty-five  per  cent,  was  in  wood- 
and,  thirty-one  per  cent  was  employed  in  growing  staple  crops,  and  the  remainder  was 
in  minor  crops,  or  reekcnied  as  farm  yards,  pasturage  and  unused  waste  laud.  It  is  prob- 
iblo  that  the  proportion  employed  in  growing  staple  crops  has  risen  to  one-third;  and  we 
may  assume  that  thirty-five  per  cent,  will  be  the  maximum  jjroportiou  of  the  new  farm 
areas  added  from  the  possible  100,000,000  acres  that  w-ill  be  devoted  to  the  production  of 
staple  crops,  thus  increasing  the  productive  power  some  16.6  per  cent.  Such  increase  is 
likely  to  be  less,  rather  than  more  than  one-sixth,  for  no  inconsiderable  part  of  these 
lauds  is  even  now  included  in  farms,  and  will  come  under  the  plow  very  slowly,  if  at  all 
Being  uow  largely  in  u.se  for  grazing  farm  animals;  and  the  requirements  for  that  purpose 
ire  constantly  increasing.  It  is  also  well  to  remember  that  100.000,000  acres,  the  available 
trable  area  still  remaining,  is  the  sum  of  estimates  liberal  in  the  extreme,  and  that  in  New 
Mexico  and  Arizona  alleged  Spanish  and  Mexican  grants  are  likel.y  for  a  long  time  to 
retard  development.  According  to  the  ascertained  per  capita  requirements  the  existing 
cultivated  area  is  suflfieient  for  nearly  67,000,000  people,  and  with  an  addition  of  one-sixth 
we  have  a  potential  supply  of  cultivated  acres  sutfleient  for  a  population  of  77,000,000. 
which  number  will  probably  be  reached  in  1900  with  an  annual  increase  of  but  2.2  per 
cent.;  but  not  till  many  .years  after  1900  will  all  these  lands  be  brought  into  production. 
Could  35  per  cent,  of  100,000,000  acres  be  at  once  reduced  to  cultivation,  the  added  acreage 
in  staple  crops  would  barely  furnish  supplies  for  such  additions  as  will  be  made  to  tlie 
population  within  seven  years. 

It  has  long  been  a  favorite  boast  that  American  agriculture  could  feed  the  world; 
but  a  critical  examination  of  its  further  possible  development  brings  us  face  to  face  with 
a  state  of  affairs  suspected  only  by  the  few,  and  shows  plainly  that  long  before  the  close 
of  this  century  the  increase  in  population  and  the  inevitable  exhaustion  of  the  arable 
soils  will  necessitate  one  of  two  things,  namel.y,  the  adoption,  on  the  part  of  the  great 
mass  of  the  people,  of  a  less  liberal  standard  of  living  or  tlio  importation  of  food.  Prob- 
ably the  ability  to  support  a  greater  population  will  come  from  a  report,  in  some  measure, 
to  the  first  of  these  alternatives. 

The  average  American,  ambitious  and  somewliat  extravagant  in  his  mode  of  living, 
(vill  be  reluctant  to  reduce  the  standard,  and  only  the  enhanced  cost  of  indispensibles 
«'ill  impel  him  thereto. 

B.v  the  adoption  of  a  more  economical  way  of  living,  and  by  the  increased  produc- 
tion which  may  follow  improved  culture,  the  per  capita  requirements  can  probably  be 
reduced  from  3.16  acres  to  3  acres,  when  the  land  now  iu  cultivation  and  that  which  can  be 
brought  into  cultivation  will  sustain  a  population  of  82,000,000— a  number  that  will  prob- 
ably be  reached  soon  after  the  close  of  the  century— while  two,  three  or  four  decades  will 
doubtless  be  required  to  bring  the  remnants  of  the  arable  areas  into  production. 

This  seems  the  more  probable  iu  view  of  the  fact  that  the  average  rate  of  increase  in 
cultivated  acres  during  the  last  five  years  has  been  but  1.6  per  cent,  per  annum,  as  agaiui-t 
8.4  per  cent,  ten  years  earlier,  and  that  it  must  grow  less  and  less  continuously,  by  reason 
of  the  constant  shrinkage  iu  the  quantity  of  arable  lauds  sub.jcct  to  draft;  hence  it  would 
be  a  most  liberal  estimate  to  place  such  increase,  during  the  remainder  of  the  century,  at 
an  average  of  three-fourths  of  one  per  cent,  per  annum,  which  would,  in  1900,  make  the 
cultivated  area  devoted  to  staple  crops  some  226,000,000  acres,  or  sufficient,  at  3.16  acret 


THE  EXHAUSTION  OF  THE  ARABLE  LANDS.  17 

per  capita,  for  a  population  of  71,500,000  (and  at  3  acres  per  cnpita,  for  a  popiilntion  of 
75,300,000),  with  the  possibility  of  aildiug  from  15  000,000  to  20,000,000  acres  more  in  the 
earlier  decades  of  the  twentieth  century.  This,  however,  is  an  extremely  liberal  estimate, 
while  a  reasonably  cautious  one  would  put  the  rate  of  increase  in  cultivated  area,  during 
the  remainder  of  the  century,  at  one-third  the  rale  obtaining  since  1884.  or  an  average  of 
one-half  ot  one  per  cent,  per  annum.  That  would  in  ten  years  augment  the  cultivated 
irea  by  10,500,000  acres  maUing  an  aggregate  of  some  221,500,000  acres,  or  sufficient,  at 
J. 16  acres  per  capita,  to  meet  the  requirements  of  70,000,000  people,  and  at  3  acres  per 
japita,  of  74,000,000,  which  is  probably  as  large  a  population  as  our  fields  can  provide  for 
during  this  century. 

In  view  of  the  progressively  rapid  reduction  in  the  rate  of  increase,  and  the  con- 
stantly diminishing  quantity  of  unoccupied  arable  laud  to  draw  from,  an  addition  of 
10,500,000  acres  of  cultivated  land  seems  to  be  quite  as  much  as  can  be  expected  in  this 
decade.  During  the  remainder  tf  this  century,  the  annual  increase  in  consumption  will 
necessitate  average  yearly  additions  of  16,000,000  acres  to  farm  areas,  of  which  nearly  one- 
third  must  be  land  actually  producing  staple  crops.  With  but  100,000,000  arable  acres  to 
draw  from,  of  which  a  considerable  part  is  already  included  in  farms,  there  would  appear 
to  be  little  dilticulty  in  determining  the  maxinjum  time  that  will  elapse  before  the  ex- 
haustion of  the  material  from  which  new  farms  can  be  carved  in  numbers  sufficient  to 
meet  the  requirements  of  the  increasing  population,  and  after  which  consumption  must, 
as  in  Europe,  be  met  from  the  products  of  a  given  and  practically  unexpanding  area  sup- 
plemented by  an  importation  of  food.  ^ 


— e-^~iS5£j^fe.25'Tr-t — 


SOME  IMPENDING  CHANGES. 

When  we  reflect  that  the  prime  factor  In  the  unexampled  prosperity  of  the  United 
States  and  our  comparative  freedom  from  many  of  the  social  and  economic  problems 
long  confronting  Europe,  has  been  the  existence  of  an  almost  unlimited  area  of  fertile  land 
to  which  the  unemployed  could  freely  resort;  that,  practically,  such  lands  are  now  fully 
occupied,  and  that  such  occupancy  has  occasioned  a  sudden  halt  in  the  westward  move- 
ment of  population  at  the  line  found  to  be  the  extreme  western  limit  of  profitable  agri- 
culture, it  may  be  well  to  inquire  what  changes  are  likely  to  result  from  the  exhaustion 
of  the  tillable  portion  of  the  public  domain. 

That  settlement  and  cultivation,  more  or  less  complete,  have  overrun  and  occupied 
all  the  tillable  lands,  with  the  exception  of  small  tracts  held  for  higher  prices,  is  shown 
by  the  reversal  of  the  current  of  population  which,  for  three  or  four  years  has  been 
moving  e:istward  from  the  great  plains  lying  at  the  base  of  the  Rocky  Mountains,  after 
the  units  constituting  this  army  of  returning  settlers  have  each  spent  years  in  futile  efiorta 
to  extort  the  means  of  subsistence  from  a  soil  lacliing  only  moisture  to  render  it  fruitful. 

Year  following  year  the  crops  have  failed,  and  the  settler.*  upon  these  arid  wastes, 
after  exhausting  their  limited  means,  have,  in  a  majority  of  cases,  been  forced  to  abandon 
their  lands  and  improvements,  representing  a  life's  savings  Such  experiences  have  prob- 
ably been  necessary  in  order  to  demonstrate  the  exhaustion  of  the  arable  lands. 

It  is  the  more  or  less  complete  rfiminatiou  of  this  factor  in  the  prosperity  of  the 
country  which  is  the  presage  of  rapid  and  far-reaching  changes  in  the  social,  economic, 
industrial  &nd  political  relations  of  the  people.  Heretofore,  when  the  invention  of  a 
labor-saving  device  threw  numbers  of  men  out  of  employment,  a  portion,  especially  of 
'vhe  more  thrifty,  resorted  to  the  public  domain,  from  which  they  proceeded  to  carve  a 
farm,  or  bought  the  farms  of  others  contemDlatioe  removal  to  the  public  domain,  in  oi 


18  SOME  IMPENDING  CHANGES. 

ciises,  found  eiiiploynieiit  in  one  of  the  many  channels  constantly  being  opened  for  labor 
In  the  iiiiprovenient  of  the  new  States. 

Weary  of  the  city  and  its  hopeless  struggles,  thousands  were  yearly  resorting  to  the 
public  d<)nKiin  while  other  thousands,  unable  speedily  to  encompass  their  desiifs  in  tliis 
direction,  still  hope  that  industry  ;itu1  economy  will  yet  enable  them  to  secure  a  home  in 
the  liniitle.-^s  West,  and  %vill  not  realize  that  there  are  no  more  free  lands  worth  owning 
until  they  have  made  such  costly  and  fruitless  experiments  as  have  the  people  now 
marching  eastward  from  the  arid  plains. 

To  the  capitalist,  the  settlement  and  development  of  the  new  Stales  has  presented 
an  invitinjr  field,  and  here  have  been  laid  the  foundations  of  many  of  the  great  fortunes 
which  excite  the  wonder  and  astonishment  of  Europeans.  In  this  undeveloped  region 
the  capitalist  and  speculator  have  found  a  new  field  for  exploitation,  possessing,  in 
latent  form,  wonderful  mineral,  woodland  and  agricultural  resources  and  fast  filling  with 
a  restless  race  of  workers  ami  consumers,  and  a  vast  territory  without  railways,  factories 
or  mines,  the  construction  or  development  of  which  promised  and  furnished  profitable 
employment  to  an  immense  capital. 

Here  the  railway  projector  and  builder  found  ample  opportunities  for  fame  and 
fortune;  the  mine  operator,  rich  mines  of  coal,  and  all  the  useful  and  precious  metals; 
the  moneylender,  men  in  almost  countless  numl)ers,  ready  to  pay  high  rates  for  the 
means  enabling  them  to  buy  this  piece  of  property  or  improve  that,  to  erect  mills  and 
factories,  open  and  equip  farms,  build  cities  and  bridge  streams,  until  tlie  West  became, 
for  the  eastern  owner  of  capital,  a  veritable  Pactolian  stream,  and  western  farm  mortgages 
were  esteemed  the  best  of  gilt  edged  securities. 

Now,  however,  all  this  is  about  to  change — is  changing.  Tlic  investor  in  railway 
securities  cannot  much  longer  invest  all  his  surplus  income  in  the  bonds  and  shares  of 
of  new  Hues,  as  little  new  mileage  will  be  either  needed  or  built  outside  of  the  Southern 
and  Pacific  States;  towns  will  expand,  but  few  new  ones  will  be  built;  new  factories  and 
forges  will  rise,  and  new  mines  be  opened,  but  local  capital  \yill  largely  be  employed  in 
such  enterpiises  and  to  those  interested  in  railway  securities  the  change  means  a  lessened 
rate  of  income,  fewer  opportunities  for  profitable  investment  in  new  lines,  the  old  lines 
largely  double  tracked,  new  and  more  commodious  equipment,  better  methods  of  admin- 
istration, less  manipulation  for  the  exclusive  benefit  of  those  active  in  the  management 
and  greater  efforts  to  serve  the  public,  and  thereby  evade  the  restraining  arm  of  the  law. 

For  the  owners  of  buildings  it  means  lower  rentals,  continuous  improvements  in 
order  to  keep  the  property  up  to  an  advancing  standard  and  a  rate  of  income  shrinking 
as  does  the  rate  of  interest. 

The  implication  for  the  manufacturer  is  a  broader  and  more  exacting  home  market 
— as  the  farmer,  receiving  for  his  products  from  50  to  100  per  cent,  more  than  now,  will 
become  a  vastly  more  liberal  and  discriminating  buyer — for  his  wares,  which  must  be 
sold  at  a  lower  price,  oflset  l)y  lower  interest  charges  and  relatively  cheaper  raw  materials 
of  foreign  origin,  and,  if  the  manufacturer  is  to  furnish  employment  to  all  who  seek  to 
enter  his  service,  it  indicates  a  search  for  distant  markets  and  a  sharp  competition  with 
Europe  for  the  trade  of  other  continents.  To  the  possessor  of  loanable  funds  it  means  a 
constant  shifting  of  investments  to  inclined  planes  where  the  returns  will,  by  reason  of  a 
constantly  increasing  competition  from  an  augmenting  supply  of  capital  seeking  invest- 
ment, continuously  diminish,  and  a  probable  restriction  of  choice  in  investments,  the 
proportion  of  borrowers  being  likely  to  lessen. 

That  the  West  is,  even  now,  in  large  part  emancipated  from  monetary  dependence 
upon  the  East,  was  made  manifest  during  the  flurries  of  last  Autumn  in  the  money  mar- 
kets of  New  York,  Boston  and  Philadelphia,  when  the  western  exchanges  pursued  the 
even  tenor  of  their  way,  with  but  little  oscillation  in  rates,  and  with  loans  about  as 
readily  procurable  as  usual. 

Producing  so  largely  of  the  useful  and  precious  metals,  and  with  an  advance  of  50 
to  100  per  cent,  in  the  price  of  the  agricultural  staples  so  indispensable  to  human  life,  and 
which  are  so  largely  grown  in  tlie  Mississipiji  valley,  the  West  will  soon  receive  immense 
accessions  of  capital,  and — as  one  of  the  results  of  tlie  exhaustion  of  the  arable  portion  of 


SOME  IMPENDING  CHANGES.  19 

the  piihlio  (U)riiaiii  — is  like  to  become  Ibe  cretiitor  sectiou  at  a  very  early  day.  Moreover 
the  products  of  manulacture  cousuiued  by  the  western  people  will,  with  no  more  farui8 
to  open  by  the  increasing  population,  be  from  year  to  year  more  and  more  the  out-turn  of 
western  establishments. 

The  farmer,  while  eng:ged  in  opening  and  equipping  his  farm,  with  prices  often  on 
a  parity  with  or  below  the  cost  of  production,  has  been  forced  to  become  a  borrower,  and 
after  paying  interest  and  taxes,  has  had  barely  the  necesaities  of  life.  Now,  however, 
with  the  relative  niimlier  of  his  competitors  yearly  le.ssening,  both  at  home  and  abroad, 
belter  prices  obtaining,  with  an  assurance — arising  from  an  increase  in  the  population 
out  of  proportion  to  any  possible  iucre.Tse  in  the  area  under  cultivation— that  well  within 
ten  years  sucli  prices  will  double,  there  is  every  reason  to  believe  that  lie  will  cease  to  be 
a  debtor. 

Without  the  possibility  of  the  further  material  expansion  of  the  cultivated  area, 
will  come  a  restriction  of  new  enterprises,  fewer  chances  to  make  great  fortunes,  and  a 
steadier  and  more  settled  social  life  for  the  comfortable  classes;  and  although  for  a  time 
the  young  man  may  not  find  the  difficulties  attending  a  start  in  life  seriously  increased, 
yet  with  the  next  generation  the  way  will,  as  a  rule,  be  open  only  to  him  who  has  wealth 
or  social  influence  at  his  command.  In  other  words,  we  shall  jilace  the  same  value  upon 
such  influences,  and  find  the  opportunities  for  a  career  to  depend  on  much  the  same  con- 
ditions as  now  obtain  in  Western  Europe. 

For  the  artisan  and  laborer  the  impending  change  points,  in  the  near-by  years,  to  a 
brisker  demand  for  bis  services,  as  the  farmer  becomes  a  more  liberal  buyer  and  builder. 

To  the  farmer  the  exhaustion  of  the  arable  lands  will  bring  changes  most  desirable. 
Not  competing  with  the  whole  world  for  glutted  foreign  markets,  the  demand  for  his 
products  will  be  steadier,  and  being  quite  sufficient  to  absorb  all  his  commodities  and 
divest  the  option  dealer  of  much  of  his  pernicious  power  over  prices,  which  will  for  years 
advance  steadily,  as  demand  will  soon  and  progressively  outrun  production,  thus  enabling 
him  to  discharge  bis  debts;  to  build  better  houses,  barns  and  granaries;  provide  more  and 
better  furniture  and  clothing,  and,  where  it  exists,  to  gratify  a  love  for  books  and  works 
of  art,  and  to  surround  his  family  with  the  comforts  and  many  of  the  elegancies  of  life 
now  enjoyed  by  other  classes,  but  which  a  meagre  income  has  placed  beyond  his  reacli. 

It  means  tliat  the  coming  generation  of  farmers  will  labor  less,  read  and  think 
more  and  to  better  puipose,  and  many  of  the  sons  and  daughters  be  educated  at  the  higher 
seats  of  learning,  and  thus  be  enabled  to  take  a  creditable  part  in  the  world's  work,  and 
that  all  the  brightest  sons  of  the  country  side  will  not  desert  the  farm,  as  it  will  promise 
something  beyond  a  life  of  unrequited  toil. 

By  the  invention  of  labor-saving  devices,  and  their  use  on  farms  sufficiently  large 
to  warrant  the  purchase  of  a  full  line  of  improved  implements,  one  man  is  now  able  to 
produce  three  times  as  much  as  forty  years  ago,  and  nearly  twice  as  much  as  twenty 
years  since,  and  although  there  seems  little  reason  to  expect  in  future  as  great  reduction 
in  the  labor  involved  in  the  production  of  staple  crops,  it  is  altogether  probable  that  such 
further  mechanical  improvements  will  be  made  as  will  enable  a  force  equal  to  that  now 
employed  on  the  farms  to  cnllivate  all  the  land  which  will  be  in  use  in  1910;  hence  there 
will  be  a  constant  movement  of  population  from  farm  to  town,  the  rural  population  aug- 
menting only  in  so  far  as  that  great  uunjbers  of  working  proprietors  will,  at  no  remote 
day,  be  able  to  and  will  employ  laborers  to  till  their  fields.  With  a  birth-rate  quite  as 
great  as  that  obtaining  with  the  urban  population  the  rural  districts  will  contribute  not 
less  than  75  per  cent,  of  their  increase  from  births— 6,000,000  before  1910— to  the  town  pop- 
ulation, necessitating  a  constant  widening  of  the  markets  for  American  manufactures. 

After  the  middle  of  the  tenth  decade  we  need  not  be  solicitous  about  a  market  for 
farm  products,  and  treaties  providing  for  the  free  entry  of  foreign  commodities  in  con- 
sideration of  the  free  entry  into  other  countries  of  the  products  of  American  farms  will 
need  revision  in  the  interest  of  American  manufactures  not  later  than  189-5,  as  we  shall 
then  have  only  such  agricultural  staples  as  cotton,  tobacco  and,  possibly,  meats  for  export. 

Careful  computations  have  been  made  of  the  probable  increase  of  population  and 
the  area  likely  to  Ije  in  cultivation  at  the  end  of  each  quinquennial  period  up  to  and  in- 


20  SOME  IMPENDING  CHANGES. 

eluding  lillO,  adopting  lower  rates  of  iucrease,  in  population,  especirdly  after  1895  — thau 
are  geneially  current,  it  being  assumed  that  the  number  of  immigrants  will  gradually 
diminish  from  natural  causes  and  restrictive  legislation,  and  that  as  the  ditliculties  at. 
tending  I  he  maintenance  of  a  family  increase  marriage  will  occur  later  in  life  and  smaller 
families  result.  On  the  other  hand,  in  estimating  the  increase  in  the  area  likely  to  be 
under  cultivation,  the  rates  adopted  are  higher  than  the  great  scarcity  of  tillable  land  and 
the  rates  of  increase — progressively  lessening — obtaining  in  recent  periods  warrant,  it 
being  deemed  best  to  maUe  this  estimate  so  libeial  that  if  there  be  error  it  shall  take  the 
form  of  a  larger  area  than  is  likely  to  be  in  cultivation.* 

Estimates  of  the  area  required  for  domestic  con-umption  are  based  upon  the  mean 
of  population  and  the  area  under  such  crop  during  the  last  ten  years,  as  reported  by  the 
Department  of  Agriculture,  after  deducting  from  such  area  the  proportion  employed  in 
growing  that  part  of  the  crop  exported  and  the  acreage  per  capita  quota  stated  is  that 
found  necessary  to  produce  only  so  much  of  the  staple  farm  products  as  is  required  for 
home  consumption  except  in  the  matter  of  cotton  and  tobacco,  which  it  is  assumed  we 
shall  continue  to  export  long  after  we  find  it  necessary  to  import  food,  as  the  cotton  lands 
are,  as  a  rule,  but  poor  wheat  lands,  and  the  commercial  world  will  long  be  unable  to  dis- 
pense with  American  cotton,  the  price  of  which  will  advance  as  do  the  prices  for  other 
agricultural  staples;  hence  southern  fields  will  continue  to  bring  the  most  satisfactory 
returns  while  devoted  to  cotton  growing. 

Eliminating  the  doubtful  factors  from  the  computations,  it  is  found  that  the  popu- 
lation will,  in  1895,  probably  reach  70,000,000,  each  unit  requiring  3.16  cultivated  acres  to 
provide  the  staple  food  products,  provender  and  materials  for  manufacture  consumed  at 
home,  and  permit  the  exportation  of  the  same  proportion  of  cotton  and  tobacco  as  now, 
the  aggregate  requirements  being  221,200,000  acres  as  against  the  220.000,000  which  it  is 
estimated  will  then  be  in  cultivation,  the  deficit  amounting  to  1,200,000  acres  and  indi- 
cating the  importation  of  food. 

At  the  close  of  the  century  population  will  probably  have  increased  to  77,000,000, 
and,  consumption  continuing  at  the  same  rate  percapitaas  now,  weshall  need  the  product 
of  243,000  000  acres;  and  with  but  226,000,000  in  cultivation,  the  neceesity  for  the  importa- 
tion of  fond  will  long  have  been  imperative. 

Ten  years  later  it  is  estinuited  that  population  will  have  increased  to  90,Q00,000,  the 
area  in  cultivation  to  234  000  000  acres  and  the  requirements  to  284,000,000— the  dficit 
reaching  50,000,000  acres,  or  18  per  cent.,  and  necessitating  the  importation  of  nearly  one- 
fifth  the  food  and  provender  consumed,  or  a  proportionate  lowering  of  the  standard  of 
living. 

During  the  twenty  years  which  will  be  required  to  add  27,000,000  to  our  population 
that  of  Europe  will  probably  increase  70.000,000,  that  of  the  La  Plata  countries  4,000,000, 
and  that  of  Canada,  Australia,  New  Zealand,  South  Africa  and  other  European  colonic 9 
fully  10,000,000;  so  that  by  1910  the  wheat-eating  populations  of  European  blood  will  have 
increased  at  least  100,000,000,  requiring  an  addition  to  the  world's  supply  of  rj  e  and  wheat 
of  no  less  than  700,000,000  bushels,  of  which  about  450,000,000  bushels  should  be  wheat. 

It  is  barely  possible  that  in  twenty  years  the  European  product  may  increase  30,- 
000,000  bushels  that  of  North  America  50,000,000,  that  of  South  America  30,000,000,  that 
of  Australasia  20.000,000,  and  that  of  India,  Persia,  etc.,  20.000,000,  making  a  possible  total 
Increase  in  product  of  150,000,000  bushels  as  against  an  increase  in  requirements  three  and 
a  half  times  as  great.  Any  increase  whatever,  either  in  the  United  States,  Europe  or 
India,  is  more  than  doubtful,  as  the  European  area  emplojed  in  growing  wheat  and  rye 
has  shown  no  expansion  during  the  last  twenty  years;  the  lands  of  India  are  fully  occu- 
pied and  the  miserably  nourished  population  ever  pressing  with  increasing  weight  upon 
inadequate  means  of  subsistence,  and  in  the  United  States  the  wheat  area  is  no  greater 
now  than  in  1880.  Moreover,  the  lands  of  Europe  are  so  fully  occupied  as  to  preclude  an 
increa.se  in  cereal  production  except  in  Russia  and  the  Danuoian  countries,  and  any  in- 
creiise  of  the  cereal  area  in  Eastern  Europe  will  be  more  than  oflset  by  the  continued 
conversion  of  grain  fields  to  the  growth  of  other  necessary  products  in  Western  Europe- 
products  that  will  not  bear  transportation  as  well  as  grain. 

•See  "Exhibit  1"  of  the  "Epitome  of  tiie  Agricultural  Situation"  following  page  24, 


SOME   IMPENDING  CHANGES.  21 


In  the  United  States  we  must,  in  order  to  secure  any  i>?rnianent  increase  in  the 
wlieat  urea,  unduly  diminisli  tlie  area  in  staples  just  as  essential  and  even  more  difUcult 
to  iniporl,  altluiugli  the  iniiiortatioii  of  an  adequate  supjily  of  wheat  does  not  promise  to 
be  au  easy  task,  as  supplies — throughout  the  world— are  certain  to  be  so  short  as  to  ensure 
an  eager  scramble  among  the  buying  nations  — including  all  Kurope  west  and  south  of 
Hungary — and  still  leave  an  unsatisfactory  deficit. 

Such  will  be  some  of  the  results  following  the  exhaustion  of  the  arable  portion  of 
the  public  domain  of  the  United  States,  accompanied  by  much  higher  prices  for  the  agri- 
cultural products  of  temperate  climates,  a  great  world-wide  and  enduring  advance  in  the 
value  of  lands  in  the  temperate  zones  susceptible  of  profitable  cultivation,  and  the  un- 
exam|)led  prosperity  of  the  landlord  and  cultivating  proprietor. 

Of  late  years  the  returns  of  the  American  farmer  and  the  European  cultivator  have 
been  but  little  more  than  sufficient  to  attbrd  a  meagre  subsistence;  but  granting  the  ap- 
proximate correctness  of  tlie  estimates  made,  it  is  inevitable  that  the  relations  of  supply 
and  demand  should,  in  the  immediate  future,  undergo  such  radical  changes  as  to  cause 
prices  to  advance  stendily  and  rapidly  to  fifty,  one  hundred  and  po-isibly  two  hundred 
per  cent,  above  tlie  level  now  obtaining;  and  such  adv.nice,  liowever  great  it  may  prove 
to  be,  will  be  so  much  added  to  the  landlord's  rentand  thecultivator'si^rofit.  As  present 
prices  cover  the  cost  of  production,  and  sucli  cost  is  far  more  likely  to  diminisii  than  aug- 
ment, the  .idvauce  in  the  price  of  farm  products  will  accurately  measure  the  ad" 
vance  in  the  value  of  land.  Hence  if  the  returns  now  cover  the  cost  of  production 
witli  wheat  selling  at  90  cents  per  bushel  and  the  average  yield  twelve  bushels  per  acre, 
■when  it  shall  sell  for  ^l.SO  per  bushel  the  returns  will  have  increased  by  $10.80  per  acre, 
and  assuming  that  only  one-lialf  the  farm  will  be  so  employed  as  to  make  such  net  returns 
and  that  money— twenty  years  hence — will,  on  real  estate  security,  loan  at  three  and  one- 
half  per  cent,  we  find  the  value  of  such  lauds  to  be  quite  ».].50  per  acre  and  equaling  the 
value  reached  by  the  lands  of  Prance  jirior  to  the  great  shrinkage  in  value  occasioned  by 
the  low  prices  for  farm  products  prevailing  In  recent  years.  On  this  basis,  should  the 
farms  and  gardens  of  the  United  States,  in  1910,  cover  au  area  of  7.50.000,000  acres  (includ- 
ing pasture,  wcmdl  ind  and  waste),  as  is  altogether  probable,  their  value,  exclusive  of  the 
live  stock  and  inii)lements.  will  reach  the  enormous  sum  of  $112, .500, 000, 000  and  their 
owners  will,  with  the  owners  of  other  real  estate,  form  a  great  lauded  interest  which,  in 
its  magnitude,  will  long  exceed  and  overshadow  all  others  and  with  an  influence  far  more 
pronounced  than  now,  although  their  numbers  will  be  proportionate  less,  make  for  stead- 
iness, peace  and  order  in  social   industrial  and  political  life. 

Tne  converse  of  tliis  class  is  likely  to  be  found  in  the  ranks  of  labor  increasing  more 
rapidly  than  other  of  the  social  elements  by  reason  of  the  continuance,  for  some  years,  of 
immigration,  of  an  inability  to  make  further  drafts  from  the  ranks  of  labor  to  the  liublic 
lands,  and  the  advance  of  land  values  precluding  the  purchase,  by  this  class,  of  as  many 
improved  farms  as  heretofore,  and  by  large  accessions  from  a  rural  population  that,  un- 
able to  open  new  farms,  increases  four  or  five  times  as  fast  as  rural  employments,  and 
which  must  in  the  absence  of  railway  construction  and  forests  to  be  felled,  of  necessity 
swell  prodigiously  the  increasing  myriads  seeding  employment  in  mine,  factory  and  forge. 

Adding  to  an  industrial  population,  now  nearly  sufficient  to  supply  all  the  warej 
Imported,  three-fourths  the  increase  of  the  rural  districts,  we  shall,  before  1910,  in  this 
manner  alone,  swell  the  urban  population  by  more  than  0,000,000;  or,  in  other  words,  of  a 
total  iucrea.'e  of  27.000,000  during  the  next  twenty  years,  fully  25,000,000  will  be  found, 
witb  other  40  000.000,  in  mine,  village,  town  and  city. 

To  employ  these  people  our  rulers  must,  in  the  absence  of  the  safety-valve  hereto- 
fore existing  in  the  public  domain,  find  means  of  opening  distant  markets  which  shall 
absorb  the  labor  of  this  vast  force  multiplied  by  the  progressive  improvement  and  em- 
ployment of  machinery  which  each  year  will  bring. 

Europe  has  long  confronted  a  somewhat  similar  .state  of  afTairs,  with  the  very  im- 
portant diftereuce,  however,  that  America  has  been  able  to  furnish  sufficieut  grain  and 
meat  to  keep  the  price  of  food  at  a  much  lower  level  than  seems  longer  possible. 


22  SOME   IMPENDING   CHANGES. 


la  1910,  with  an  urban  population  of  65,000,000,  it  may  be  necessary,  in  order  to 
employ  such  an  enormous  force,  to  adopt  such  a  fiscal  policy  as  will  ensure  the  free  entry 
of  all  materials  euteriug  into  manufactures  which  we  are  unable  to  produce,  and  to  so  levy 
imposts  as  in  no  measure  to  lessen  Durability  to  compete  with  Europe  for  the  trade  of 
the  world,  and  thus  postpone,  to  the  latest  possible  day,  that  social  condition  necessitating 
emigration  to  South  America,  Australia  or  Africa. 


THE  FARMER  IN  THE  COMING  CHANGE. 

Twenty  years  since,  wherever  the  cultivator  owned  the  land  he  occupied  he  was 
esceptioually  prosperous  and  so  continued  to  be  until  about  the  middle  of  the  eighth  de- 
cade, when  the  opening  of  so  many  new.farms  in  the  Missouri  valley  and  t!;e  divc'lopment 
of  Indian  wheat  exportation  so  changed  the  relations  of  supply  and  demand  for  food 
products  that  prices  fell  greatly  and  the  farmer's  revenue,  from  a  given  area,  was  nuuh 
lessened;  yet  it  is  more  than  questionable  if  this  lowering  of  the  price  of  food  has  rtsuUed 
beneficially  to  the  industrial  classes,  although  it  has  enabled  them  to  buy  their  food  for 
less  money,  yet  probably  such  food  has,  because  of  the  disastrous  change  in  the  farmer's 
condition,  actually  cost  them  more  labor  than  it  would  had  prices  remained  at  the  level 
obtaining  during  the  first  half  of  the  eighth  decade,  when  the  price  (in  gold)  of  Eiiglisli 
grown  wheat,  in  the  markets  of  Great  Britain,  was  85  per  cent,  greater  than  the  price 
obtaining  in  the  same  markets  in  the  year  1890,  as  the  changed  conditions  surrounding 
the  employment  of  the  capital  and  labor  of  the  farmer  have,  in  a  very  large  measure,  de- 
stroyed the  purchasing  power  of  the  most  numerous  class  of  thecustomersof  the  merchant, 
manufacturer,  artisan  and  laborer. 

The  agricultural  population  of  the  United  States  number  some  25,000,000  and  is 
forty  per  cent,  of  the  whole  and  when  the  purchasing  power  of  such  a  great  proportion 
of  the  peopfe  has  been  destroyed  or  greatly  diminished  it  means  lessened  employment  for 
others,  lower  wages  as  well  as  a  lessened  purchasing  power  on  the  part  of  all  the  indus- 
trial classes,  more  or  less  commercial  stagnation,  hard  times,  a  descending  scale  of  land 
and  other  values  and  increased  indebtedness  on  the  part  of  the  producing  classes,  whose 
wares  are  selling  at  or  below  the  cost  of  production.  This  has  long  been  the  case  with  a 
very  considerable  part,  if  not  the  whole,  of  the  agricultural  class  and  has  resulted  in  less 
power  to  purchase  the  products  of  the  labor  of  others,  who,  in  turn,  have  thereby  had 
their  purchasing  power  diminished  so  that  the  whole  economic  fabric  has  been  subjected 
to  unprofitable  conditions  which  have  aflected  all  classes  alilie,  if  in  varying  degrees. 

In  the  case  of  the  American,  as  well  as  all  other  farmers,  the  reduction  in  his  re- 
turns has  been  abnormally  great,  as  the  prices  of  farm  products — as  measured  by  the  price 
of  wheat — were  85  per  cent,  greater  during  the  first  half  of  the  eighth  decade  than  those 
obtaining  during  the  year  just  closed,  and  this  change  in  price  very  accurately  measures 
the  change  in  his  purchasing  power  and  the  result  is  that  he  wears  last  year's  coat,  buj'* 
little  or  no  hardware,  puts  up  few  or  no  new  buildings,  makes  the  old  buggy  last  another 
year,  the  daughter  has  to  do  without  the  promised  musical  instrument,  the  son  cannot 
secure  the  expected  education  and  the  makers  of  hardware,  coats,  books,  pictures,  organs, 
pianos,  furniture  and  carriages  and  teachers,  transporters,  merchants,  jewelers,  professional 
men  and  artisans  are  but  half  employed,  and  find  it  more  difficult  to  buy  flour  made  from 
seventy-flve  cent  wheat  than  they  would  if  wheat  h>d  never  sold  below  $1.50  per  bushel. 

This  state  of  affairs  has,  however,  under  the  conditions  which  have  existed  in  this 
country,  probably  been  inevitable,  and  while  many  such  auxiliary  causes  as  the  unrea- 
sonable exactions  of  the  transportation  companies  and  the  far-reaching  and  baleful  prac- 


THE   FARMER  IN   THE   COMING  CHANGE. 


23 


tices  of  the  Board  of  Trade  gambler  in  farm  products  have  been  largely  contributory,  the 
primary  and  potent  cause  lies  deep  down  in  that  desire  of  the  race  to  own  a  home  and  to 
Bit,  each  man,  under  his  own  vine  and  fig  tree  which  has  found  such  wide  scope  for  its 
realization  on  the  public  domain,  where  all  were  welcome  to  a  farm  without  money  or 
price;  and  this,  in  the  absence  of  a  retarding  forest  growth,  resulted  in  an  increase  of  112 
percent,  in  the  cultivated  area  of  the  United  States  during  the  fourteen  years  ending 
with  188.5,  while  population  increased  but  44  jier  cent. 

During  the  last  half  decade,  however,  a  radical  and  far-reaching  change  has  obtained 
— obtained  because  the  raw  material  from  which  farms  are  made  has  been  practically  ex- 
hausted—and while  population  continues  to  increase  in  nearly  as  great  a  ratio  as  prior  to 
1885,  or  12..5  per  cent.,  the  cultivated  area  increased  but  seven  per  cent.,  and  the  rate  of 
the  acreage  increase  is  yearly  and  progressively  lessening,  one  consequence  being  that  the 
quantity  of  land  employed  in  the  production  of  food  for  exportation  has  diminislied  from 
21,000,000  acres  in  1885  to  10,000,000  acres  in  1891,  and  continuing  to  diminish  at  the  same 
rate  will,  by  1895,  have  wholly  been  absorbed  by  the  requirements  of  our  added  population. 

The  following  table  shows  the  rapidity  of  agricultural  development  and  the  pro- 
gressively decreasing  rate  at  which  additions  are  being  made  to  the  cultivated  area  and 
indicates  the  early  coming  of  that  time  when  the  American,  and  especially  western, 
farmer  will  be  the  most  prosperous  member  of  the  community: 

EXHIBIT  SHOWING  INCREASE  OF  CULTIVATED   AREA  IN  THE  UNITED  STATES  AND  THE 

RATES    PER  CENT.   OF    INCREASE. 


1871 


Cultivated  Area  in  Staple, 

Crops,  Acres [    93,000,000 

Increase  of  Cultivated  Area 

in  Each  Period  Acres ' 

Rate  per  cent,  of  Increase 

in  Each  Period. 

Increase  of  Cultivated  Area 

Each  Year  during  Each 

Period,  Acres 1 

Yearly  Rate  per  cent,  of  In-j 

crease  during  Each  Per'dl 


1875 


123,000,000 

30,000,000 

32.2 

7,500,000 
8.1 


1880 


165  000,000 

42,000,000 

34.1 

8,240,000 
6.8 


1885 


197  000,000 

32,000,000 

19.4 

6,400,000 
3.9 


1890 

211,000,000 

14,000,000 

7.1 

2,800.000 
1.4 


The  preceding  table  shows  that  during  the  fourteen  year  period  ending  with  1885 
the  increase  in  cultivated  acres  was  not  less  than  112  per  cent,  as  against  an  increase  in 
population  of  44  per  cent.  This  phenomenal  increase  was  not  only  sufficient  to  meet  the 
requirements  of  the  great  additions  made  to  our  own  population,  but  also  quite  stiffieien^ 
to  meet  the  additions  made  to  the  European  populations  and  still  leave  a  surplus  to  be 
stored  as  reserves,  which  have  been  drawn  upon  in  later  years  when  current  production 
has  been  less  than  curreut  needs.  Now,  however,  our  additions  to  the  area  under  culti- 
vation are  less  than  equal  to  half  our  added  needs 

Concurrently  with  the  addition  of  so  many  new  farms  in  the  United  States  the 
Indian  government  abrogated  the  export  duty  upon  wheat  and  Indian  exports  that  ag- 
gregated but  464,000  bushels  in  1871  rose,  in  1S87,  to  41,500,000  bushels  without,  howeveri 
any  increase  of  the  Indian  W'lieat  area;  indeed  the  area  sown  to  wheat  at  the  close  of  the 
ninth  decade  was  a  million  acres  less  than  in  1870,  the  augmented  exports  being  very 
largely  due  to  the  increasing  and  inconceivable  poverty  of  the  Indian  cultivator  who  has 
been  ol)liged  to  sell  an  ever  increasing  proportion  of  his  crop — as  the  price  fell — to  paj'  the 
constantly  augmenting  land  (rent)  tax,  although  a  population  increasing  three  times  as 
fast  as  the  cultivated  acreage  actually  required  this  food  for  home  consumption. 

The  result  of  such  a  disproportionate  increase  of  population  and  cultivated  acreage 
in  the  United  States  and  the  compulsory  exportation  of  wheat  by  the  starving  Indian 
ryots  is  seen  in  the  fact  that  whereas,  during  the  five  years  ending  with  1875  the  average 
price  (in  gold)  of  Eugli-h  grown  wheat  in  the  markets  of  Great  Britain  was  $1.64  per 
bushel,  it  was  but  95  cents  during  the  five  years  ending  with  1890.  In  other  w<irds  wheat 
— Tvhio'.i  is  the   key  to  the  agricultural  situation — during   this  fifteen   years  shrank  in 


24  THE   FARMER   IN   THE   COMING   CHANGE. 


selling  price,  in  consequence  of  the  opening  of  so  many  American  farms  and  the  de- 
velopment of  Indian  exports,  no  less  than  69  cents  per  bushel,  and  the  price  of  all  other 
primary  staple  food  products  have  sbniiikeii  in  like  proportion.  Is  it  any  wonder  that 
times  are  hard  and  st;ifj;natiou  every wheie  \v lien  the  fountiiin  has  been  dried  at  its  source? 

The  price  of  wheat  having  l)een  73  per  cent,  greater  for  the  five  years  ending  in 
1875  than  during  the  last  five  years,  it  follows  thpt  the  purchasing  power  of  the  farmer 
has  been  lessened  in  nearly  like  measure,  although  ;here  has  been  some  little  reduction  in 
the  cost  of  production.  Add  again  this  proportion  to  the  purchasing  powfT  of  the  im- 
mense agricultural  class  of  the  United  States  and  every  artisan,  laborer,  mvner,  manu- 
facturer, transporter,  builder  and  professional  man  will  be  fully  employed,  wages  good 
and  the  whole  industrial  life  be  quickened  in  an  astonishing  manner.  It  is  almost 
impossible  to  comeive  that  such  a  change  is  impending  after  the  experiences  of  recent 
years,  when  the  farmer  has  seen,  notwithstanding  all  his  industry  and  privation,  the 
debt,  with  its  annual  interest  charges,  yearly  increasing.  That  such  a  change  is  impend- 
ing and  is  susceptible  of  proof,  as  data  exists,  and  but  requires  the  labor  and  patience 
necessary  to  its  gathering  and  tabulation,  to  show  that  there  is  a  deficient  acreage  as  well 
as  a  most  direct  relationship  between  population,  acreage  in  staple  food  products,  prices 
for  such  products  and  the  prosperity  of  the  cultivator,  as  well  as  the  prosperity  of  all 
other  classes,  as  there  can  be  no  doubt  that  all  the  industrial  forces  are  just  as  dependent 
upon  and  just  as  intimately  connected  with,  the  properity  of  the  basic  industry  as  in 
that  remote  past  when  the  founder  of  the  second  Persian  monarchy  said:  "Tliere  can  be 
no  power  without  an  army;  noarmy  without  money, and  no  money  without  a  prosperous 
agriculture."  In  the  view  of  this  most  successful  statesman  the  farmer  was  the  ultimate 
source  of  all  wealth,  as  well  as  power,  and  to  see  thiit  such  is  still  the  case  we  have  only 
to  watch  the  stock  markets  and  observe  how  values  rise  and  fall  as  the  crops  are  full  or 
meagre. 

Many  things  have  changed  since  the  days  of  Artaxerxes.  and  industrial  processes 
differ  wonderfully,  but  the  great  underlying  principles  have  not  changed,  and  when  the 
basic  industry  is  in  an  unprosperous  condition  there  will  be  but  little  money  moving, 
and  that  little  movingslowly  through  the  arteries  of  industrial  and  commercial  life,  while 
the  body  politic  will  be  in  just  the  state  we  have  spen  during  the  period  when  the  acreage 
devoted  to  the  production  of  food  inciensed  more  rapidly  than  the  consuming  population. 
Now,  however,  the  condition  of  the  farmer  is  changing  for  the  better  more  rapidly  than 
his  affairs  changed  for  the  worse  during  the  eighth  and  ninth  decades. 

Wheat  production  may  be  said  to  be  the  controlling  factor  in  acreage  distribution, 
as  well  in  production,  as  the  product  is  at  all  times  and  everywhere  saleable  at  some  price 
and  it  is  the  one  product  that  the  farmers  of  the  temperate  zone  rely  most  upon  to  furnish 
the  needed  money.  This  is  no  less  true  of  Russia  than  of  Australasia;  no  less  true  of  the 
United  States  than  of  India,  and  the  result  is  that  of  the  area  now  employed,  in 
America,  in  producing  food  for  exportation  about  eighty  per  cent  thereof  is  devoted  to 
the  production  of  wheat. 

During  the  eighth  decade  the  wheat  acreage  of  the  world  increased  (in  round 
numbers)  24,000,000  acres,  or  15.6  per  cent.,  and  treating  the  compulsory  exports  of  India 
as  being  equivalent  to  an  addition  of  acreage,  the  additions  to  the  supplies  of  the  bread- 
eating  populations  of  European  blood  was,  during  that  decade,  equal  to  the  product  of 
27,000,000  acres,  and  the  ascertained  average  yield  per  acre  would  give  a  yearly  out-turn 
of  320,000,000  bushels;  which,  at  4.75  bushels  per  capita,  was  tqual  to  the  requirements  of 
67,000,000  people,  while  the  bread-eating  populations  increased  41,000,000,  so  that  had  rye 
kept  pace  with  the  increase  in  the  rye  consuming  part  of  the  bread-eating  world  there 
would  have  been,  at  the  end  of  the  eighth  decade,  a  surplus  wheat  acreage  equal  to  the 
requirements  of  26,000  000  people. 

Assuming  that  the  wheat  acreage  twenty  years  since — when  prices  were  73  per 
cent,  greater  than  in  1890 -was  sufficient  to  meet  the  requirements  of  the  then  existing 
population  we  And  the  acreage,  at  the  beginning  of  the  ninth  decade  (treating  the  recently 
developed  Indian  exports  as  an  increase  of  available  acreage  equal  to  the  production 
of  a  like  number  of  bushels),  was  some   9,500,000  acres   in  excess  of  requirements,  and 


25 

". .  (being 
,,»'  added 

'  jppiyi 

/  ,   out  of 

'V  blood 
"  "'  serves 
^^'  urplua 


ai 


,TT,Ud  the 
J  n,  and 

"I'll  adda 

'    'dly  be 

/  have 


urplus 
juance 
8  great 
iusted- 
md  as 
itional 
uid  for 
ion  in- 
50,000,- 
e  must 
lly  add 
Q  years 

s  have 
jorting 
onlj'  in 
staples 
jtatoes, 


rtOi^t. 


an  one- 
)on  the 
abroad, 
.  of  the 
ih  more 


«0<:.. 


domain 

ition  ot 

export 

00,000,- 

er  food 

ices,  as 

ud  the 

iu  con- 

luce  of 

ill  uot 

iixteen 

ive  his 

es;  Ilia 

1   ley  he 

1    -ced  to 

r,  they 

hereas 


AN     EPITOME 

OF  THE  AaRICULTURAL  SITUATION,  AND  AN  ESTIMATE  OF  AMERICAN  PRODUCTION  AND  REQUIREMENTS  FOR  FOUR  QUINQUENNIAL  PERIODS. 


EXHIBIT  I.    Shewing  Estimates  of  population  of  the  United  G 


..  Acres  In  Cultivation  and  Required,  and  Indicating  Probabto  Extent  of  Imports  of  Pood  after  I  890. 


Yua 

BtTIKATED  POrU- 

EVTIMATH  OV  CUI-TITATED  ARKA  IN  IK'"  STArL*  aaiuia»I>  TO 

EntlmaUs 

homesnd 

foreign  needi 

al  a  0.81  of 

au  iicre  per 

capita 

EMtlmalM 
of  acreage  Id 

quired  to  meet 
home  needs 
and  export 
same  propor- 
tion of  Cotton 
as  now  at  a  J.lfl 
acres  percnpltJi 

EiUmatee  of  Area  wUcti  mVt  be 
Id  Mltlvation.  the  rata  parcnnuot 
iDcrenu,  auO  the  pa- cmplM  quota 

...-incniln, 

prodtK.tof 
eiporwd 

aillmnllng  retiulre- 

acrei  per  capita 
nnd'lIId'l"l"nTlhe 

"  ln't(Si'alit(&" 

Surpliii  »l>owii 

ruii'  a  .H-ldacre* 
ptrn> pita  and 
eniilvnlcnllo  tho 

Quiutwr  or  pvopln 

noDlred  to 

Wheat  al 

•      O.«ofau 

acre  per 

■xplla 

revnlred  Id 

Comal 

*      LIB  acre. 

a     ii'.-v  ofan 

■rpff 

por 

B(rtlm»t«l 
Population 
la  years 

Rata 

per 

™" 

Increase 

Eitlmiiltsof    I  Oirn 

InHlaptecrops     acr«^ 

In  the  years         per 

named           OipllA 

1886 
1890 
1695 
ISOO 
1905 
1810 

19 

la 

12 
10 

fl.i 

7.1 

66,700.000 
82.600,000 
70,000.000 
77,000,000 
84.000.000 
90.000.000 

28,730,000 
80,000,000 
83,600.000 
88,960,000 
40,320,000 
43.200,000 

68,280,000 
74.376,000 
63,300.000 
91,630,000 
90.960,000 
107.100.000 

8,855,000 
9,876.000 
10.800,000 
11.660.000 
12.600.000 
13,500,000 

17,267,000 
19,375,000 
21.700,000 
23.870.000 
26.040.000 
27.600,000 

197,000,000   d3.53 
211,000.000    rt3.40 
220.000.000       3.14 
226,000  000  1     2.94 
230,500.000      2.74 
234.400,000  ,     2.60 

21.000,000' 
13.500,000  f 

6,645.000  h 

4,300.000  (- 

380,000 

b    S.47S,000 

1   1,080,000 

,    10.820,000- 

24..376,0«l 
S7,300/MC< 
30,030.000 
32.760.000 
3S.  100.000 

40,000.000 

44.800.000 
49.280,000 
63.760,000 
67.600,000 

187,500,000 
281,200.000 
243.800.000 
266.400,000 
284.400,000 

c     7.1 
4.35 
2.70 
2. 
1.70 

1,200,000- 

h|  7, 300,000- 

34. goo. OOO 

60,000,000- 

Showlng  the  Wheat  Production  and  Consi 
of  the  World  during  the  Oth  Decade. 


n.  F«r  iiiuiiner  of  a«<L«rIaliiiDg  per  capilit  -niula  soreuge  see  Ex- 
hibit 3. 

b.  Exhibit  1  shows  that  before  1900  we  must  either  Import  bread- 
stuff; oeiiBO  to  export  oittnn.  or  lower  the  Bliindard  of  UvjDg. 

c*  lu  Exhtbils  I  and  5  nole  great  dluiiiiiltlon  in  rate  of  Inorense 
ofpultlviitedHi  re«.  ntpedaUy  In  periods  ending  with  lf«.5aml  1890 

d.  Itt  Exhlhll  1  iiiit«  the  reduction,  from  1886  to  1890,  io  amount 
of  land  in  culttvutioii  per  capita. 


e.  Exhii.ii  Jsbows  ihe  vi-ry  aiirriilicaot  fact  that  in  hut  ii -iiikrli- 
ye.irBini'f  tie  hurvest  of  IHSl-o  luis  tlie  currenl  produetiou  of  wheu'' 
i-nunlledthecurreal  requiretneiilB,  und  that  were  tbeaQDual  hiirvi-ale 
ii^iitjundiinttie  llie  !;reat  one  of  I8S7-8  they  would  not  dow  aufflce. 

f  ExhlNle2aiid  4  show  the  productive  power  of  the  wheat-fields  Of 
ili.Mnrldlolie  BUfh  lis  loclenrly  indicate  a  present  f  1881)  yearly  deficit 
"(  iii-T':  thou  100,000.1)00  bLiahelB  and  with  no  greater  rate  of  incroiise 
"!  mrt-iige  tnaii  hue  obtained  ainuf  1880,  such  deficit  will  an  n  mil  ly 


lUfe'iiie 


III  V  more  rhan  ■:0,0«0,()00  l>uehels. 

Exhibit  2  HhowB  thill  reserves  of  more  than  2r,i),ono.iiOll  lnHhelB, 
accumulated  during  the  earlier  years  of  the  ninih  decade  ihere  Is 
every  reoBon  to  believe  have  been  exhausted  and  that  in  future  we 
rauHt  rely  upon  eurrent  production  to  meet  cuirent  needa,  and  that  a 
large  defiicit,— wholly  todc-peiirlent  of  the  deplorable  condiiioo  of 
growing  European  crops  and  due  ulone  to  dcBcient  iicrenKe, — will  be 
painfully  upparentat  tb^etidof  th<^  1S9I-2  harvest  year,  oei-easltullDg 


Ha  r.  fat 
Year 

ProduPllon  Id 

e    Builiela 

•    Bushels 

The  Year's 

Hurpliii, 
•    Bushel) 

ThP  Y(-,u-'« 

l).  ii.-n. 
e    Bu«l,eU 

1681-3 
1682-3 
1683-4 
1884-6 

1885-6 
1888-7 
1  1387-6 

,as..» 

1669-00 
1890-1 

1,977.000.000 
2,263.000,000 

3.021,000,000 
2,047.000.000 

ff  

aie.000,000 

44,000,000 
23,000,000 

2.263,000.000     2,099.000.000 
2.077.000,000  .    2-127,000,000 
2,043.000,000      3,164,000.000 
f  2.287.000,000     2.188,000,000 
2,183,000.000     8,216.000.000 
S.048.000,000     8.246,000.000 
2.186,000.000  'f  2,280,000.000 

164,000,000 

60,000,000 
111,000,000 

80,000,000 

83.000,000 
IB7.000.000 
06,000,000 

Total*, 

21,366,000,000  31,443,000.000 

466.000,000 

862.000.000 

B    Apparent  Deficit  Auffoat  111,  1691,    07,000,000 

EXHIBIT  3.    ShowlDe 

acri'iu.-''  roiiulrod  per  cap- 
ita to  fuTDlsh  ■toples  con- 
sumed Id  tbo  u.  S.  and 
Cotton  ezpoTtad  a*  com- 
putedfromjlaat)  too  vaara 
ot-'ieaceaiid  produottoiiaa 
set  forth  la  tha  reporta  of 
the  DepartmaDt  Of  Aart- 
"■'* first    dodootiiis 


Wlu.„t 

aoaas 
...0.48 

Oau 

PotaUMaad 

..  0.16 

' "1 

Total  of  .. 

...... 

extraordinary  drafts,  early  In  18S2,  upon  Indiu,  i^nnth  Aiuerk-n  umi  AiiBtralubiu,  which  will  full  far 
short  of  mteting  the  pressing  need*  whilu  trenching  serlouhly  U[j.'m  euppliea  that  will  be  ait  badly 
needed  in  the  following  year. 


EXHIBIT  4.    Showlngth*  Wheat  Acreage  of  the  World  In  1870,  lasoend  I  890.  Average  Yield  per  Acre, 
Productive  Power  and  Requirements 


Oaoo  aAPBlOAL 

Diviaio* 

Acres 
loWhsai 

Spelt 
1870 

Id  WheM 
and 
spell 
1880 

and 
Spelt 

1800 

Clidngw 

d.irlnK  eih 

decade  Id 

Wheat 

Acrcmce 

Yield 

per 
acre 

years 
Bd. 

A.Tf^eotlWO 

.".'JI'.SS'K. 

product  or 
BnsbeU 

ReqnlremeaU 
Id 

laso 

Buebels 

93,090,000 

18.992.000 
1.647,000 

86.000,000 
1,200,000 
1JJ60,000 

llJi83,000 

1,256,0004 
137,0OO-t 
118,000-h 
829,000 
602.000k 

S.OOCOOO-I- 
386,0004 

13.0 
12.1 
13. 
10. 
10.3 
10. 
10. 

1. 228.000.000 
461. .100.000 
34.320.000 
360.000.000 
39.667.000 
43,960,000 
181,060,000 

1.466.000.000 
367,000,000 
30,000,000 
236,000,000 
31,000,000 
25,000,000 
136.000.000  1 

2.342,000 
26.812,000 
3,386,000 
1*00.000 
18.610,000 

2.640,000 
24.983,000 
3.870,000 
4.396,000 
18,196.000 

Australasia  

Other  Countries     

Totals  and  Nat 

Increase  In  Aareag*, 

168,882,000 

177,310.000 

161.474,000 

J  4,164.0004 

12.1 

2,188.197.000 

2.280.000,000 

EXHIBIT   0.    Showing  Increase  of  Cultivated  Area 

In  the  United  States,  and  the  Rates 

Per  Cent,  of  Increase. 


Ybab 

Cultivated 
Area 

In 
Staple 
ProducU 

Acres 

Cnltlvated  Area 
Id  eacti  period  and 

k       oflDcrease 

lO'^rcaseorCDltl- 
vaied  Area  eacb 
year  dnrlng  each 
p«rl-.il,  and  yearly 
rule  per  cent, 
of  Increase 

Acres 

Rale 

PM 

oeat. 

A<« 

Bate 
per 
eeot. 

1676    123.000,000 
1680    166,000.000 
1866    107,000.000 
1890   211,000,000 

30,000.000 
42.000,000 
32,000.000 
14,000,000 

•32. a 

34.1 

19.4 

•     7.1 

7.600,000 
6.240.000 
6,400.000 
2,600,000 

•  6.1 
8.6 
3.0 

..J   price  of  \ 

Id  Esxlasd  and  at  Ottlcago  and 
»nTinni  averaii^B  values  par  '~~ 
shal  of  Wheat    exported  1 
the  XTnlted  States. 


EXHIBIT  7.  Showing  20  Years'  Exports  of  Wheat  from  India,  Russia  and 
the  United  States,  Including  Flour,  the  Average  per  Year  during  each 
Five-year  Period,  and  the  Total  for  Twenty  Yeara, 


Y«A« 

!!ll 

||i| 

1    .46 

;     874 

1.09 

.14 

876 

.-3  ■ 

.07 

.34 

h.  Exhibit  4  shows  that  during  the  eighth  dei-ade  tbe  wheat  acre. 
ageof  the  world  increased  24.0011,000  acres,  of  which  the  United  Htutcs 
contributed  10,000,000  acres,  or  79  per  cent.  During  the  ninth  decade 
the  Inorease  was  but  4,164,000  acres,  of  wbloh  tbe  United  States  contrib- 
uted 187,000. 

During  the  eighth  decade  the  bread-eating  populations  increased  11.4 
per  cent,  and  (lie  wheat  area  16.6  per  cent.,  while  that  of  rye  reruuined 
the  same.  During  Iht  ninth  dtf^dr  thr  infretue  in  the  wff.at  (and 
rye)  area  uku  but  1.4  per  cent,,  as  againut  an  incr-rtuit  in  t/ie  contntruini; 
populfitinn  of  14  per  cent.,  (lie  ratio  bring  lu  Oft*  i»  to  ten.    ThlB  showing 


is  astounding.     Doet  it  not  indicate  great  scarcity  and  high  pricta  at  an 
early  d'ly  f 

J,  Although  the  last  tea  years'  inoreaee  In  the  aereuge  Indicates  an 
Increase  in  the  annual  wheat  supply  of  but  ."iO, 000.000  bushels  yet  tbe 
bre'id  eating  populations  have  invrea»'d  o6.000.(K>0,  requiring  an  addi- 
tion to  tbe  annuiJ  supply  of  more  than  260,000,000  bushels  of  wheat  and 
IbO.OOO.OOO  busbelH  of  rye,  and  yet  the  rye  gelds  are  no  gremer  than  in 
IRSti.  But  for  tbe  exceaslTe  wheat  acaeage  exiating  during  the  «arli.-r 
part  or  the  ninth  decade,  permitting  the  accumulution  uf  large  reserves, 
tbe  pinch  of  si-^arcily  would  long  since  have  Ijeeu  felt. 


k.  In  the  United  8tat«a  a  phenorocmil  Incrense  of  cultivated  area 
began  uliout  IKTI,  and  in  the  next  14  years  populall'in  increased  44  per 
cent,  and  snob  area  11-'  per  cent,     (t'^ee  Bxiilbit  5.) 

n.  From  1871  to  1889  the  i_gold)  price  of  English  grown  wheat,  In 
the  marheis  of  (.Ireat  BriCtain.  shrank  47  percent,  aa  against  a  &I1  of 
33  per  cent,  in  tbe  currency  price  at  Chiciigo  and  38  per  cent,  io  the 
value  of  American  wheat  exported.  &o  wide  a  difference  in  tbe  depre- 
ciation is  due  tu  tb«  lessened  cost  of  iraneportiition ,  which  benefits  the 
Americitn  farmer  while  having  the  opposite  effect  upon  hie  competitor, 

a:    li  the  acreage  m»d 


1672  . 
1873 
1874 
1876 


1678  - 
1877 
1878 
1670  . 
1680  . 


464,000 
1,189,000 

736,000 
8,278,000 
3,004,000 
1.884,000 


4,087^0 


11397^00 
1.672,000 

4. 109.000 


e.8i6Aoo 


Totala 


13.806,000 
87,140,00* 
26,496,000 
39,203,000 

^■6B8,00O__ 

89,«a6,000 

80.838,000 
41  668,000 
26.271.000 
32.876,000 
26.764,000 
ttS,960  000 
351.892  000 


67,474,000 
68.631.000 
68.664,000 
41.437,000 
46,870.000 


64,010,000 


68,762,000 
66,018,000 
61,688.000 


aaj>ie.ooo 

60318.000 


81,574,000 
38,096,000 
88,016,000 
91.610,000 
78,913,000 


68,408,000 


147.61 

18Q,a04j000 

io9j)a«4Me 


86,588.000 
48.978,000 
76,374,000 
83,780.000 
67,726,000 
62,664.000 


91.757,000 
61  612.000 
77.796,000 
136.116.000 
_    107.261.000 

oo.eoe.ooo 

1.301,000,000 


168,888,000 

iai,8S«,ooo 

147,611,000 
111,884,000 
132.670.000 


140,088,000 


84.586.000 
163806,000 
119.626,000 
68,601,000 
_  106,430,000 
I13.2O8.000 
2,129.427.000 


EXHIBIT   8.     Showing  the   World's   Area   In   Food  Staples     of  the   Temperate  Zones'  In    1870,    i  880  and   ISOO:     Acreage  Quotas  per 

Capita  :   Percentages  of  Quota  Increase  and  Decrease,  and  Acreages  Above  and  Below  Requirements,  as 

Indicated  l>y  Mean  Quota  for  T;«enty  Years  and  that  for   I  870. 


Puonocts. 

IB'TO 

xeso 

^^. 

3.B30 

Df'"«d'e       Twenty  Years 

n.r;i,°° !  .*"™~, 

Acroa^es 

Above  aud 

Below 

Rcqulrcmonui 

osliidltjiled 

Blapica 

Per 

Cap]  1.1 
Acrrace 

Acres              fer 

Id             Capita 
Suplc^         Acreage 

Per 
OenLor 

BTld 

DecrcHJie 

Acreage 
Quota 

1 

Acr.'                Per 
Io               CaplU 

Per           Per 
Ceal.  orceni.  of 

Iiifteasp.lDcreate 

and           and 
Decrciue  Decreaae 

o(             or 
Acreaup  :  Acreage 
«Ji.r.ta    I    Q„oi« 

Mean 
or  per 
Caplu. 

cfeage 

Quota 

Below 
Meaa 

Below 
RequlrrmcDU 

ailndlCQUrd 
by  Aor«aKO 

Quotas 
ror  Twenty 

tWlleatft  Spelt 
are  &  Kaallu 

163,362,000 
100.076.000 

0.427 
0,304 

177,310,000    0.443 
106.346,000    0.271 
43.480.000     0.108 
90,003,000    0.S27 
110,377.000'    0.276 
23.616,000    0.060 

3.74- 
10,9- 
13.6- 

3,74- 
17.4-1- 

8.3- 

161.474,000    0,398 
108,304,000    0.238 

.4,660.000'   0.006 
104.686.000    0.230 
127.632,000!  0.280 

86,839  000|   0.058 

10.3 

12.8- 

10.2- 

.3-1- 
1.4-1. 
6.1- 

6.8- 
21.7 
22.2- 

6.01- 

le.M- 

B.2- 

0.423 
0,271 
O.lll 
0.286 
0.264 
0.068 

0.026- 
0.033- 
0.013- 
0.006-1- 

o.oia-i- 

0.003- 

11.400,000- 
16.048.000- 
6.926.000 
2.280,000-i- 
7,296. 0OO-l■ 
I,36B.0O0- 

13,224  000- 
30.096,000- 
12,768  000 

6,016  000-1 
80,620.000-1- 

2  280  000 

78,700.000i    0.210 
64.176.0D0    0.286 
81.766,000!   0.061 

Maiio,    Bto.  ., 
Potatoaa 

■WorWaTotaU 
AU  Staplea 

492,467.000    1.372 

'664.031,000    1.386        o'.9+ 

693,047.000,    1.300         8.1      ,      6.3-    j    1.362 

0.063- 

23  712.000- 

32  832.000 

UsVl^Uu'.fb^    ai^BOOO.ODOj                 1  400.0O0.OO0| jll.4PrCt    466,000.000    jl4.0Prtt  27.0ftl», 

1 

yo  vrbeD  II  00 nHtl lutes 
inly  yoant  tliSADpi 


aiTueri 

ft  Isvqually 

prodaotive  power  yet.  by 


iirrica  xhoald  i| 
■ir  Ryp  relailvt 


that  moat  Wr1t«i«  trfatvol 

_ -,- .-luon  of  the  yearly  viirlnlli 

a  poor  Indication  or  compnrallva  productive  power 


net  for  thij  last  ten  years,  anri  ntldlnj;  I'n.non.imi 
I'.reonllncnts.and  cailllnulhe  mt-iin  ofpopiilatioii 
.Kv  consumed  an  averaijeof  i,;ii;i.iJJO.i't«i  bushels  or 
I  unit  or  the  population  hna  been  'iM  busliela, 
(-■iporla  from  the  olllclal  catlniali^  or  prudur^ 
r     all    iiiiriMUiia.    Is    (ouud    to    have    bima    i.vt 


buKhels  per  mpi 
bMn  330,01)0.  <-u  1 
biubsu  per  c:ip 
eloHlyappiu^iin 


The  Hnnuai  ooQium 
I  there  would  appejir 


u  annual  aoreace  t 
jr  capita  for  these 


Lions  vrtll  hercDtlerrequlreo.caAul'  ui 
r  such  population  hnvlne  or  liile  y 
•asooaele  to  expect  that  the  Inrrtn' 

linearly  8  000,000 acres  more  tliiin  re 
I-  |wr  caplLu  requlrementjc  prove  10 
,-lith  decade  and  the  rate  of  incri'if 
':  I'lil  yeani.  the  addltloDSIo  the  rye 


iwcniy  years— i 


olhe  world'"  rye  and  n 


Inv 


long  will  I 

>f  the  met  II 


for  seven  years.  bu« 
ulla  bfllDc  about  nix 
perable  dllflculty  lu 
rtad-cjitlng  peoplw. 


I  la  growing  the  bread- 
eqnal  to  the  prodQctof 
lining  that  tho  bread- 
'  In  ryo  and  wheal,  and 


.crea  of  rye  and 

:lon  equal  that 
nrea  ehonld  ex- 

wenty  year^.  al 
■  II  6«ofan  ncre. 
«  the  addmon. 
Ids,  being  more 


tiie  United  siate*  •■'■>, 
(M.UW.OW  acn-it doi*  riiii 
IndiRs  from  which  it 
irnnti  tax.  to  wrlnKK'i 

I'lvcion'Mtlii""  w. 


hni  tmt  to  CI 

1>  pOMlbll 


liitluu,  and  uuipl(.H  nii'uuh  ut  iruuopuruitlon-  In  the  at>- 
.-n  Will  be  very  alow.  But  three  regions- Auxlrataala, 
'•■■<.  meet  tbe  flnt  tbtec,  and  In  all  the  available  area  Is 
>.:  in  tbe  United  Stales  twenty-five  year*  slooe,  aad  each 
iiUtion  and  the  means  or  transportation. 
iw  prima  were  alT^l«d  by  tbe  opening  or. 


lands  not  rertllinvd 
tlon  ar<>  or  Io 
>)  ranting 

will,  rn-H  "in 
wttnever 


..  from  India,  during  the  elKhlh^hd  ninth  decades, 
Ezhlblta  6,  a  and  7. 
.  .  _  3  Increase  maoafaciured  articles  indennliely,  there  Is 
the  Isnd  can  be  iDcrea-ed.  and.  under  eilfllDg 
produd  of  any  given  ari-a  !•  nolllfcr' ■ 


I  far.  the  rnost  prosperous 
d- lie  owns  and  cultlva(«r  ' 
1,  rorogo  aad  SiMt  crops  ol 


telyu   . 

Dgbronsht  under  c 

i»  aecooipnnylag  data  the 


EXHIBIT  9.    Showing  the  WHEAT  and  RYE  Acreage  of  the  World  at  the  Clos* 
of  the  Ninth  Decade  and  the  Annual  Average  Product  for  Ten  Yeara. 


w 

H1£AT 

RYE  AND  MASLIN            |  | 

GKOOHAPUICal. 
DlVIHtOH. 

Acre,  lb 

Average  Prodnot 

A  eras  in  Ryo 

Average 

w  and  Spelt 

Miulluf 

J?:SSI8S§ 

310  271  000 

4  6  3  000 

76  000,000 

Germany  —  -.- 

iSpaln            - 

79  070  000 

2  500  000 ■ 

Belstum          . 
1  Portugal          

7,785  000 

tlHSOOOO 

3  806.000 

Greece 

42.000 

106,678  000 

1279,230,000, 

Eui-opear^  Totals 

94  446  000 

1,222.722  000 

38  184.O0O 

439  767  000 

2.366  000 

25.251  000; 

Other  Countries 

13  196.000 

110  608,000 

World  Totals 

161,474  000 

2.139  676  000 

108  364  000 

1,306.641000 

ind  Turkey  Includes  Bnlgarla 


wlu  addition  to  tbe  w 
ibout  IO,DOO,UOD  and  tha  n 
inpply  of  breadnlum. 


EXHIBIT  10.     Showing  the  Geographical  and  Acreage  Distribution,  at  the  End  of  Three  Decennial  Periods,  of  the  World's  Area  in  Grain  and  Potatoes,  and  Total  Acreage  in  Each  Staple,  and  Total  in  Each  Geographical  Division, 


• 


1870 

OB  THE  BSD  OP  THE  SEVENTH  BECADE. 

1  HHU 

OR  THE  END  OF  THE  EIOHTB  DBCADB. 

i8»o 

OB  THE  END  OP  THE  NINTH  DECADE. 

DivtaioM 

'3' 

8peltt 

"rfiiisf 

Acrea 

In 
larloy 

Aore* 

la 
Oau 

Acres  ta 

„    H«1M. 

Bucawhntt. 
Millet.  Eta. 

Acr«* 
Potatoes 

Acres 

all 
BtaplM 

Acre* 

Wb^t 
andSpeltl 

Acwa 

Rye 
and  irfaallDt 

Acres 

Id 
Barley 

Acres 
Oats 

Aares  la 
MalM, 

Millet,  Eu. 

Acres 
PolatMs 

in 

aU 

Staplas 

Acres  Id 

Bpeltt 

»«f 

la 
Barley 

Oats 

Acre*  la 

Mnlie. 

Buekwheal, 

Millet   Etc 

Acni 

PollllOS 

Acrse 
In 

Europe 
HnlWd  SUtea 

1  Oanwla 
Inilla 

Aoatralaala 
South  AmorloB 
Other  Ooaatrtoa 



1  847,000 

I  2B0  000 
11.283  000 

107  827.000 

e'obd 

39  393.000 

'eooiooo 

61  000 
4  203  000 

1.600.000 
360.OO0 
48.000 

42.662,000 

39.184.000 

312,000 

142  000 

..SSS:888 

Ifl  047.000 

1  325,000 
403  000 

60.000 

4.629,000 
2. -b. 000  000 
1,833,000 
I  7B0  000 
ie,8BB  000 

03  191.000 

37,987,000 
2.342.000 

26  812  000 
3  369  000 
1  800  000 

12.810,000 

106  440  000 

■111883 

9  000 

36,381,000 

'iir8g8 

71416,000 

'l:ilf.888 

438.000 
72.000 

44  245.000 

"'538:888 
«S:§88 

1,373.000 

21  186,000 

■  135:888 

90.000 

16,000 

^°:?il:888 

2,696.000 
18.380,000 

l2:St:8S8 
a3:3ii:888 

3.670.000 

■l:?IS:8S8 

106,876.000 

2,366,000 

1 20.000 

J:883 

86,010,000 
2,067.000 
1,187,000 

4,810:000 

73,008,000 

"5:585:888 
"1:888 

60,000 

43,039.000 

79.232.000 

900  000 

2  8SS888 

1.386JX)0 

'476;000 

187.000 
40  000 

370  634  000 
16.873,000 

World  Totala, 

163,362  000 

109.078.000 

46.386,000 

79.T00.00O 

4.116000 

21.785,000      462.467,000 

177.810.000 

106  346,000 

43  480,000 

60,908.000 

110.377,000 

83  816  000 

664.031.000 

161.474,000 

108.864,000 

44,660,000 

104.888,000 

127.632.000        26.839,000 

693,047.000 

THE   FARMER   IN  THE   COMING  CHANGE.  25 

during  that  decade  there  was  added  to  such  wheat  producinp:  area  4,164,000  acres  (being 
but  2.3  per  ceut.)or  an  iiiv;t  iqual  to  tlie  refjuirenients  of  10,000,000  people  which,  added 
to  the  2<j,000,000  which  the  Kurjilus  aciviifro,  at  the  bejritiniiiR  of  the  decade,  would  supply, 
and  we  have,  at  the  end  of  the  niiitli  deiade,  a  supi)ly  sufflcient  for  but  30,000,000  out  of 
the  56.000,000  that  have  been  added  to  llie  bread-euting  iiopulalious  of  European  blood 
since  18S0  the  residue  bavin,^,  up  to  this  time,  been  supplied  by  the  enormous  reserves 
that  accumulated  in  .mill,  warehou.se  and  farm  granary  during  the  existence  of  a  surplus 
acreage,  such  reserves  being  now  quite  exhausted. 

From  the  bvst  data  obtainable  it  would  appear  that  with  an  average  yield  the 
world's  crop  of  wheat  is  now  100,000,000  bushels  less  than  the  yearly  consumption,  and 
that  each  passing  year,  by  reason  of  the  increase  in  the  bread-eating  population,  adds 
from  twenty  to  twenty-five  millions  to  this  yearly  deficit,  so  that  by  1895  it  can  hardly  be 
less  than  200,000,000  bushels  if  the  per  capita  requirements  remain  as  large  as  they  have 
been. 

Up  to  the  present  time  the  reserves  accumulated  during  the  existence  of  a  surplus 
acreage  have  sufficed  to  meet  this  deficit — such  deficit  in  the  five  years  of  its  continuance 
and  growth  having  probably  aggregated  300,000,000  bushels  less  the  excess  of  the  great 
crop  of  1887-8 — but  there  is  abundant  evidence  that  these  reserves  are  everywhere  exhausted- 

The  people  of  Eurojie  yearly  consume  about  three  bushels  of  rye  per  capita,  and  as 
no  additions  have  been  made  lo  the  world's  rye  fields  since  1870  there  is  an  additional 
draft  of  something  like  17,000,000  l)ushels  with  each  recurring  year  to  meet  a  demand  for 
wheat  created  by  the  failure  of  tlie  rye  fields  to  expand  as  the  rye-eatiug  population  in- 
creases, and  this  has  consumed  much  of  the  world's  surplus  of  wheat — probably  150.000,- 
000  bushels  since  1880 — hence  each  year's  addition  to  the  supply  of  wheat  and  rye  must 
hereafter  be  from  43,000,000  to  44,000,000  bushels.  In  other  words,  we  must  annually  add 
to  our  wheat  and  rye  fields  nearly  4,000  000  acres,  while  theadditionsof  the  last  ten  years 
have  been  but  400,000  acres  per  annum. 

All  additions  to  the  area  devoted  to  the  two  orincipal  bread-making  grains  have 
ceased  in  Europe  as  a  whole;  have  ceased  in  the  Uuiied  States,  and  among  the  exporting 
countries  such  area  is  increasing  only  in  Canada,  Australia  and  Argentina,  and  only  in 
Argentina  does  it  keep  pace  with  domestic  requirements.  The  other  primary  food  staples 
.show  a  somewliat  greater  relative  increase,  but,  taking  all  kinds  of  grain  and  potatoes, 
they  are  increasing  less  than  one-half  as  fast  as  the  consuming  population. 

Of  recent  years  the  cultivated  acreage  of  the  United  States  increasing  less  than  one- 
half  as  fast  as  the  domestic  requirements,  we  are  yearly  making  great  inroads  upon  the 
acreage  heretofore  employed  in  producing  the  grain  and  animal  products  sent  abroad, 
and  while  we  now  export — exclusive  of  cotton — something  less  than  six  per  cent,  of  the 
products  of  our  farms,  this  percentage  must,  from  increasing  home  needs,  diminish  more 
than  one-fifth  per  year. 

Owing  to  our  inability  to  make  further  considerable  drafts  ujion  a  public  domain 
that  has  been  practically  exhausted  of  its  tillable  portion  and  the  rapid  augmentation  ot 
domestic  population  and  requirements,  it  appears  probable  that  we  shall  cease  to  export 
food  at  the  end  of  five  years,  and  as  the  world  will  then  be  annually  short  some  200,000,- 
000  bushels  of  wheat  and  a  still  greater  quantity  of  rye,  to  say  nothing  of  other  food 
staples,  high  prices  must  then  obtain,  but  we  need  not  wait  five  years  for  high  prices,  as 
the  deficient  acreage  now  obtaining  ensures  such  prices  from  this  year  forward,  and  the 
impossibility  of  making  good  this  deficit  in  the  world's  food  areas,  while  population  con- 
tinues to  increa-;e  at  anything  near  present  rates,  assures  the  prolonged  continuance  ol 
such  prices  and  high  prices  for  the  products  of  the  farm  means  that  the  farmer  will  not 
much  longer  be  under  the  neces.sity  of  working  on  an  average  from  fourteen  to  sixteen 
hours  per  day  and  that  he  will  soon  take  his  rightful  place  in  the  world  and  receive  his 
share  of  the  good  things  of  life.  He  will  build  better  houses,  barns  and  granaries;  hia 
land  will  rapidly  double  and  treble  in  value,  and  being  able  to  secure  what  money  he 
actually  requires  from  the  sale  of  only  a  portion  of  his  produce,  he  will  not  be  forced  to 
sell  when  all  others  are  doing  likewise;  hence,  while  prices  will  be  so  much  better,  they 
will  also  be  far  steadier  and  fluctuate  onlv  as  affected  by  suddIv  and  demand,  whereas 


24 

selling  pri 

velopraent 

primary  St.   j^rn  r-j-jpi  • 

times  are  h    *  ' 

The] 
1875  tbian  c 
has  been  lo 

tiie  cost  of 

.J      ' 

mense  agri   .    ;ao 

fucturer,  tr-^"~'T 

and  tlie  w       ■'f" 

impossible         ■; 

years,  wlie     .  Hi*;? 

debt,  with     ',  *  ■' 

ing  and  is  i— T~" 

necessary  t'O**®*' ' 

as  a  most  cl<j:>op.  '  '  i 

for  such  pr      nn  . 

other  classi      ,  ' 

upon  and 

that  remot 

no  power  \ 

agriculture 

source  of  a  -niuinu  i 

to  watch  tl 

meagre.  ' 

Mau  i't» 

differ  wo)) 
basic  iudu: 
and  that  11 

the  body  p                                                                             .  jiti  t 
devoted  to  


Now,  how  'srUanlworlS    .*•  Tt& 

his  affairs 

Wh( 
as  well  in 
and  it  is  tl 
the  ueedec 
United  St 
America,  : 
the  produi 

Dur 
numbers) 
as  being  e 
eating  po] 
27,000,000 
of  320,000 
67,000,000 
kept  pace 
would  ha 
requirem 

Asi 
cent,  gre 
populutii 
develope 
of  a  like 


THE   FARMER   IIST  THE   COMING  CHANGE.  25 

during  that  decade  there  was  added  to  such  wheat  producing  area  4,164,000  acres  (being 
but  2.3  per  ceilt.)or  an  area  equal  to  the  requireiiients  of  lO.dOO.OOO  people  which,  added 
to  the  2t>,000,000  which  the  surplus  acrcagt',  at  the  lie,i;iniiiii<?  of  the  decade,  would  supply, 
and  we  have,  at  the  end  of  the  ninth  decade,  a  supply  .sufllcicnt  for  but  36,000,000  out  of 
the  56.000,000  that  have  been  added  to  the  bread-eating  iiopulations  of  European  blood 
since  18S0  the  residue  havin;^,  up  to  this  time,  been  supplied  by  the  enormous  reserves 
that  accumulated  iu.inill,  warehouse  and  farm  granary  during  the  existence  of  a  surplus 
acreage,  such  reserves  being  now  quite  exhausted. 

From  the  bpst  data  obtainable  it  would  appear  that  with  an  average  yield  the 
world's  crop  of  wheat  is  now  100,000,000  bushels  less  than  the  yearly  consumption,  and 
that  each  passing  year,  by  reason  of  the  increase  in  the  bread-eating  population,  adds 
from  twenty  to  twenty  live  millions  to  this  yearly  deficit,  so  that  by  18!)")  it  can  hardly  be 
less  than  200,000,000  bushels  if  the  per  capita  requirements  remain  as  large  as  they  have 
been. 

Up  to  the  present  time  the  reserves  accumulated  during  the  existence  of  a  surplus 
acreage  have  sufficed  to  meet  this  deficit — such  deficit  in  the  five  years  of  its  continuance 
and  growth  having  probably  aggregated  300,000,000  bushels  less  the  excess  of  the  great 
crop  of  1887-8 — but  there  is  abundantevidence  that  these  reserves  are  everywhere  exhausted- 

The  people  of  Europe  yearly  consume  about  three  bushels  of  rye  per  capita,  and  as 
no  additions  have  been  made  lo  the  world's  rye  fields  since  1870  there  is  an  additional 
draft  of  something  like  17,000,000  bushels  with  each  recurring  year  to  meet  a  demand  for 
wheat  created  by  the  failure  of  the  rye  fields  to  expand  as  the  rye-eating  population  in- 
creases, and  this  has  consumed  much  of  the  world's  surplus  of  wheat — probably  150.000,- 
000  bushels  since  1880 — hence  each  year's  addition  to  the  supply  of  wheat  and  rye  must 
hereafter  be  from  43,000,000  to  44,000,000  bushels.  In  other  words,  we  must  annually  add 
to  our  wheat  and  rye  fields  nearly  4,000  000  acres,  while  theadditionsof  the  last  ten  years 
have  been  but  400,000  acres  per  annum. 

All  addilions  to  the  area  devoted  to  the  two  Rrincipal  bread-making  grains  have 
ceased  in  Europe  as  a  whole;  have  ceased  in  the  Uuiied  States,  and  among  the  exporting 
countries  such  area  is  increasing  only  in  Canada,  Australia  and  Argentina,  and  only  in 
Argentina  does  it  keep  pace  with  domestic  requirements.  The  other  primary  food  staples 
show  a  somewhat  greater  relative  increase,  but,  taking  all  kinds  of  grain  and  potatoes, 
they  are  increasing  less  than  one-half  as  fast  as  the  consuming  population. 

Of  recent  years  the  cultivated  acreage  of  the  United  States  increasing  less  than  one- 
half  as  fast  as  the  domestic  requirements,  we  are  yearly  making  great  inroads  upon  the 
acreage  heretofore  employed  in  producing  the  grain  and  animal  products  sent  abroad, 
and  while  we  now  export — exclusive  of  cotton — something  less  than  six  per  cent,  of  the 
products  of  our  farms,  this  percentage  must,  from  increasing  home  needs,  diminish  more 
than  one-fifth  per  year. 

Owing  to  our  inability  to  make  further  considerable  drafts  upon  a  public  domain 
that  has  been  practically  exhausted  of  its  tillable  portion  and  the  rapid  augmentation  of 
domestic  population  and  requirements,  it  appears  probable  that  we  shall  cease  to  export 
food  at  the  end  of  five  years,  and  as  the  world  will  then  be  annually  .?hort  some  200,000,- 
OOO  bushels  of  wheat  and  a  still  greater  quantity  of  rye,  to  say  nothing  of  other  food 
staples,  high  prices  must  then  obtain,  but  we  need  not  wait  five  years  for  high  prices,  as 
the  deficient  acreage  now  obtaining  ensures  such  prices  from  this  year  forward,  and  the 
impossibility  of  making  good  this  deficit  in  the  world's  food  areas,  while  population  con- 
tinues to  incrca-e  at  anything  near  present  rates,  assures  the  prolonged  continuance  of 
such  prices  and  liigh  prices  for  the  products  of  the  farm  means  that  the  farmer  will  not 
much  longer  be  under  the  necessity  of  working  on  an  average  from  fourteen  to  sixteen 
hours  per  day  and  that  he  will  soon  take  his  rightful  place  in  the  world  and  receive  his 
share  of  the  good  things  of  life.  He  will  build  better  houses,  barns  and  granaries;  hia 
land  will  rapidly  double  and  treble  in  value,  and  being  able  to  secure  what  money  he 
actually  requires  from  the  sale  of  only  a  portion  of  his  produce,  he  will  not  be  forced  to 
sell  when  all  others  are  doing  likewise;  hence,  while  prices  will  be  so  much  better,  they 
will  also  be  far  steadier  and  fluctuate  onlv  as  affected  by  suddIv  and  demand,  whereas 


26  THE   FARMER    IN   THE  COMING   CHANGE. 


now  theyarw  affected  by  his  necessities,  which  impel  him  to  market  hisproducta  just  when 
every  one  else  is  doing  so,  the  result  being  seasons  of  glutted  markets  and  low  prices, 
which  once  down  are  bard  to  elevate,  while  the  overmarketing  in  tlie  earlier  part  of  the 
harvest  year  places  a  wonderful  power  in  the  hands  of  the  gambler,  who  unliesitatingly 
uses  it  to  further  wreck  prices.  Once  the  farmer  is  in  a  position  to  hold  his  products, 
until  they  are  required  for  immediate  consumption,  the  market  wiocker  will  be  divested 
of  much  of  his  pernicious  power  over  prices  as  then  it  will  be  tlie  amount  of  real  stuff 
offiering — not  the  fictions  as  now — which  will  determine  prices. 

The  coming  of  this  advance  in  the  returns  of  the  farmer  means  a  most  profound 
change  in  all  political,  industrial  and  financial  relations,  as  the  farmer  will  cease  to  be  a 
borrower  and  this  will  necessarily  cause  a  lowering  of  interest  rates  and  the  West  pro- 
ducing, as  now,  an  immense  surplus  of  food  staples  which  the  East  must  have,  great 
sums  will  yearly  move  permanently  from  the  East  to  the  West  in  payment  for  high 
priced  farm  products  and  this  will  result  in  converting  the  west  from  the  debtor  to  the 
creditor  section. 

Results  so  desirable  to  farmers,  east  as  well  as  west,  and  to  all  interested,  directly 
or  indirectly,  in  western  property  or  securities  will  come  because  the  consuming  element 
of  the  bread  eating  world  has  more  than  caught  up  with  that  enormous  development  of 
agricultural  lands  that  to  the  thoughtless  seemed  to  make  good  the  boast  that  we  could 
feed  the  world. 


SOME  SURPLUS  PRODCTOlNG  STATES. 

Only  the  twelve  States  named  in  the  following  tables  produee  a  surplus  of  the 
great  food  staples,  while  such  States  as  Ohio,  Michigan  and  Washington  produce  a 
surplus  of  wheat  alone.  Their  entire  acreage  in  food  and  forage  staples  being  found  to  be 
less  than  the  normal  per  capita  quota  of  2.85  acres,  they  are,  notwithstanding  the  fact 
that  their  lauds  are  above  the  average  of  the  whole  country  in  fertility,  not  clearly  surplus 
producing  States,  hence  are  not  included  with  those  that  are,  although  it  is  questionable 
upon  which  side  of  the  line  they  belong. 

From  the  data  to  be  found  in  the  accompanying  pages,  and  in  the  broad  sheet  fol- 
lowing; page  24,  it  is  clear  that  hereafter  such  States,  dlstrietsaud  individuals  as  produce 
the  staple  products  largely  in  excess  of  domestic  needs  will  enjoy  an  unexampled  pros- 
perity, as  they  will  be  able  to  command  very  high  prices  for  their  surplus — prices  so  much 
greater  than  the  average  cost  of  production  as  to  leave  a  very  large  profit,  hence  the  most 
fertile  districts  will  be  the  most  prosperous  and  the  surplus  food  producing  States  of  the 
Mississippi  basin,  large  areas  upon  the  Pacific  slope  and  limited  districts  in  the  mountain 
regions  being  exceptionally  productive,  it  follows  that  the  prosperity  which  they  will 
enjoy  will  be  equally  exceptional. 

If  the  conditions  as  to  climate  and  fertility  are  equally  favorable  it  would  appear 
that  such  States  as  produce— relatively  to  domestic  requirements— the  greatest  surplus  of 
food  would  enjoy  the  greatest  prosperity;  the  accumulation  of  wealth  be  greatest,  and  the 
advance  of  land  values,  such  as  to  soon  place  them  upon  a  par  with  those  of  the  best  of  the 
older  districts. 

That  we  may  get  a  definite  idea  of  the  present  relative  importance — agriculturally 
—of  the  sever.al  States  that  produce,  and  are  likely  to  continue  to  produce,  a  surplus  of 
the  staple  food  crops  it  is  best  to  resort  to  a  tabular  exhibit  showing  the  areas  in  corn, 
wheat,  oats,  other  cereals  and  potatoes,  separately,  the  several  States  being  placed  in  the 
order  indicated  by  the  total  area  of  each  under  such  crops. 


SOME  SURPLUS  PRODUCING  STATES. 


27 


States. 

Acres 
.   in  Corn. 

Acres 
in  Wheat. 

Acres 
In  Oats. 

1 

Acres  In 
Other  Ccr'ls 

Acres  in 
Potatoes. 

Total  Acr'ge 
in  Food 
Staples. 

Illinois 

8,022.000 

8,860  Olio 

6,776,000 

6,796,000 

3,668,000 

4,097.000 

768.000 

1,102,000 

885,000 

160  000 

8,000 

1,853,000 
1,685,0110 
8,600,000 
1,603  000 
2,494.000 
1,418,000 
3,144.000 
1,073,000 
4,210,000 
3,300.000 
887,000 

3,372,000 
2,567,000 
1,. 303,000 
1,413,000 
1,017,000 
1,053,000 
1.500,000 
1,407,000 
1.183,000 
71,000 
222,000 

308,000 

333,000 

205,000 

63,000 

65,000 

276.000 

419,000 

770,000 

280.000 

817,000 

41,000 

146,000 

188,000 

139,000 

86,000 

79,000 

84.000 

82.000 

138,000 

58,000 

61,000 

20,000 

13,701,000 
13,633,000 
11,023,000 
9,961,000 
7,323,000 
6,928,000 
6,913,000 
4,580,003 
6,616,000 
4,409,000 
1,178,000 

Iowa 

Missouri 

lDdiai)f\ 

Nebraska 

Nrinnesotii 

Wisfonsiii 

California 

Ore'^oii 

Totals 

40,142,000 

25,267,000 

15,198,000 

3,577,000 

1,081,000 

85,265,000 

In  this  exhibit  it  is  seen  that  the  States  named  produce  51  per  cent  of  the  acres  of 
corn;  65  per  cent,  of  the  acres  of  wheat;  59  per  cent,  of  the  acres  of  oats;  57  per  cent,  of 
the  acres  of  barley,  rye  and  buckwheat,  and  43  per  cent,  of  the  acres  of  potatoes. 

While  Illinois  takes  first  rank,  Iowa,  is,  even  now.  a  close  second  and  soon  likely  to 
take  the  lead  in  total  area  under  food  crops,  as  slie  now  ranks  first  in  the  matter  of  sur- 
plus production,  and  as  the  highest  degree  of  prosperily  is  likely  to  result  from  the 
greatest  production  in  excess  of  domestic  requirements,  it  is  probable  that  Iowa  will  long 
retain  first  rank  while  the  relative  rank,  in  the  race  for  wealth,  of  the  surplus  producing 
States  would  appear  to  be  very  clearly  indicated  in  the  following  table,  where  each  Stata 
holds  the  place  earned  by  its  power  to  produce  food  in  excess  of  present  domestic  needs, 
and  wherein  is  shown  the  population,  the  area  under  food  and  foraf,'e  staples,  the  number 
of  people  each  can  subsist  from  the  acreage  now  devoted  to  such  crops,  the  number  that 
could  be  subsisted  by  the  cultivated  acreage  in  excess  of  the  present  population  and  the 
per  capita  acreage  under  cultivation: 


Population. 


Iowa , 

Kan.sas 

Illinois 

Nebraska 

Minnesota.... 

Missouri 

Dakotas 

Indiana 

Wisconsin.... 

California 

Oregon 


1,912,000 
1,427,000 
3,820,000 
1.059,000 
1,302,000 
2,679,000 

512,000 
2,192.000 
1,687.000 
1,208,000 

314.000 


> 

SB'S 


17,.SOO,000 

12,.S00,000 

18,200,000 

8,300,000 

7,700,000 

11,600,000 

7,800,000 

9,200,000 

6,000.000 

4.900,000 

1 ,656,000 


Totals 18,118,000     105,556,000 


■,K 


w  rt  o  ( 
CTp-rt 

■2or 

f^  ^  n  S 
n  ti  <r*  rn 


or 


fT> 


6,070,000 
4,316,000 
6,385,000 
2  912,000 
2,702,000 
4,070,000 
2,736,000 
3,228.000 
2,316,000 
1,719,000 
518,000 


36.972,000 


^2  ;  3  = 

^3    k-*     t       (0 


4.158,000 

2,889,000 

2,559,000 

1,653,000 

1,400,000 

1.391.000 

2,224  000 

1,036,000 

629,000 

511,000 

207,000 

18,917,000 


So- 

re® 

:  ?f3. 


9.10 
8.63 
4.76 
7.84 
5.91 
4.33 


4.20 
3.91 
4.06 

5.S8 


5,83 


This  showing  is  remarkable  and  very  significant,  making  manifest,  as  it  does,  that 
of  the  191,000,000  acres  employed  in  the  Republic  in  the  production  of  grain,  hay  and 
potatoes  no  less  than  105.500.000— or  65  per  cent.— are  to  be  found  in  the  twelve  surplus 
producing  States,  and  while  they  have  a  population  of  18.000,000  they  now  produce  sulli- 
cient  of  the  primary  food  staples  for  the  subsistence  (even  at  the  present  high  standard  of 
living)  of  87,000,000  jieople.  This,  however,  but  inadequately  measures  their  relative 
productive  power,  as  such  is  the  fertility  of  their  lands  that,  aside  from  the  production  of 
such  a  great  proportion  of  the  primary  staples,  they  are  pre-eminent  (or  an  ability  to  pro- 
duce the  secondary  forms  of  food  as  they  do  the  animals  used  for  draft  and  pleasure,  as  is 

*Tbe  reports  of  the  Department  of  Agriculture  not  showing  tlie  Jtuiiotas  BOparutely,  It  ie  Imprao 
ticable  to  determine  the  per  capita  acreage saliefactorlly. 


28 


SOME  SURPLUS   PRODUCING  STATES. 


clearly  shown  iQ  the  foUowiug  table,  stating  the  nuin'isr  of  horses  Cittla  and  swine  la 
tlie  United  States,  and  In  each  of  these  States,  on  tlie  first  of  January,  1391,  as  set  forth 
In  the  report  of  the  Department  of  Agriculture  for  that  month: 


Horses. 

Cattle. 

Swine. 

United  Statbs 

14,057,000 

52,895,000 

50,625,000 

Illinois 

1.124  000 
1,095  000 
748,000 
806,000 
648.000 
558,000 
391,000 
433,000 
237,000 
361,000 
181,000 

2,859,000 

3,959  000 

2,679,000 

2,632,000 

1,762,000 

1,770,000 

1,183  000 

1,540,000 

951,000 

840  000 

827,000 

4,944,000 

5,921  000 

Kansas 

3,144,000 

Missouri 

4,586,000 

Indiana 

2.561,000 

Nebraska 

2,310,000 

Minnesota 

538  000 

Wisconsin 

Dakotas 

California 

1,110,000 
429  000 
518,000 

Oregon 

230,000 

6,582,000 
47  per  cent. 

21,002  000 
40  per  cent. 

26,291,000 

Percent,  of  whole 

52  per  cent. 

While  the  States  named  have  but  29  per  cent,  of  the  population  of  the  United  States 
they  have  55  percent,  of  the  acreage  in  the  great  food  and  forage  staples,  and,  having  a 
soil  much  above  the  average  iu  fertility,  produce  63  per  cent,  of  the  grain,  hay  and  pota- 
toes of  the  nation;  47  per  cent  of  the  horses;  40  per  cent,  of  the  cattle,  and  52  per  cent, 
of  the  swine. 

If  hereafter  farm  products  are  to  rule  as  high  iu  price  as  is  implied  by  the  world's 
deficient  acreage,  the  exhaustion  of  the  available  lands  and  the  disproportionate  rates  at 
which  cultivated  acres  and  population  ar.e  and  have,  for  years,  been  increasing  then  the 
three  preceding  tables  would  indicate  that  such  States  will  long  eujoj'  an  unexampled 
prosperity,  and  that  such  as  have  the  greatest  cultivated  acreage  per  capita — as  have,  iu 
the  order  named,  Iowa,  Kansas,  Neliraska  and  the  Dakotas— would  seem  to  have  every 
assurance,  by  reason  of  a  surplus  proportionately  the  greatest,  of  being  the  exceptionally 
prosperous  parts  of  the  food-producing  West. 


-li^.. 


Given  a  bread-eating  popuation— the  world's— Increasing  at  the  rate  of  14  per  cent 
In  ten  years  and  an  acreage  in  grain  and  potatoes  increasing  at  the  rate  of  7  per  cent.,  it 
Is  only  a  question  of  time  when  scarcity  and  high  prices  will  result. 


-•<••►- 


As  the  farmers  of  the  West  become  prosperous  and  farm  lands  advance  in  value  so 
wVll  nrosner  all  other  western  interests  and  western  town  property  enhance  in  value. 


AN  OPEN  LETTER. 

To  John  Williams,  Esq.,  St.  Louis,  Mo. 

Df.\r  Sir  :  IlefeiTiriR  to  your  letter  of  July  12tli,  I  beg  leavo  to  say  that  my  rea- 
sons for  believing  that  good  lands  anywhere  in  tlie  United  States  will  be  worth  $100  an 
acre  within  tive  years,  are  as  follows  : 

No  matter  how  much  or  how  little  land  there  may  be  under  wheat,  we  must  have 
a  given  C|naiitity  under  each  of  the  other  stai)les,  as  is  succinctly  set  forth  in  the  follow- 
ing exhibit  as  is  the  manner  of- arriving  at  such  quantities. 

ExiirBiT  showing  the  acreage  re(]iiired  per  capita  to  furnish  staples  consumed  in  the  U, 
S.  and  cotton  exported,  as  coin[>uted  from  (last)  ten  years  acreage  and  production  as 
set  forth  in  the  reports  of  the  Department  of  Agriculture,  first  deducting  the  pro- 
portion of  tobaci'o  and  grain — including  the  secondary  form  of  auimals  and  animal 
products — exported. 

Acres. 

Wheat 0.48 

Corn 1.19 

Oats 0.39 

Hay 0.64 

Barley,  Rye,       ] 
Buckwheat,     I  n  ,, 

Potatoes  I  "'^^ 

and  Tobacco,  J 
Cotton 0.31 

Total  of 3.16 

Just  as  soon  as  we  lessen  the  quantity  of  hay  or  any  other  staple  (needed  for  domestic 
consumption)  below  the  current  requirements,  the  price  of  that  product  will  advance  out 
of  all  proportion  to  the  price  of  other  staples,  and  land  will  at  once  revert  to  the  growth 
of  the  high-priced  product  and  there  will  be  a  lessened  production  of  one  or  more  o) 
the  other  staples,  the  price  of  which  will  rise  if  the  quantity  produced  is  less  than 
current  needs. 

There  is  an  exact  and  ascL-rtaiuable  ratio  between  population  and  the  production  ol 
each  and  all  of  the  farm  staples  entering  into  general  consumption,  and  my  investiga- 
tions have  been  directed  to  the  determination  of  this  relationship. 

With  a  surplus  of  land  in  cultivation,  the  product  of  which  must  be  marketed 
abroad,  it  has  not  been  as  easy  to  determine  this  matter  as  it  will  be  when  this  surplus 
has  been  eliminated,  as  the  elimination  of  this  surplus  will  enable  us  to  see  the  more 
clearly  the  inexorable  character  of  the  law  of  demand  and  supi)ly,  and  when  our  people 
shall  require  all  our  products  he  who  runs  may  read  the  proportions  of  such  relationship. 
That  we  have  not  seen  it  before  is  probably  due  to  the  fact  that  we  have  had  too  much 
land  in  cultivation,  and  could  increase  any  one  }j}oducl  at  ivill  without  diminishing  the 
domestic  supply  of  any  other.  This  is,  however,  about  to  change— and  by  ^  about"  I  mean 
within  five  years— and  such  desir.able  change  as  is  coming  will  be  greatly  hastened  if  we 
can  deprive  the  short-sellers,  o,n  the  "Boards-of-Trade,"  of  their  baleful  power  over  prices 

We  cannot,  us  you  suggest,  take  the  pasture  lands  to  grow  wheat  and  other  cereals 
as  the  moment  we  reduce  the  number  of  cuttle  (other  than  milk  cows)  below  530  to  1,000 
people,  just  that  moment  beef  will  become  the  most  profitable  product  of  the  farm  and 
great  multitudes  will  rush  into  the  cattle  business,  as  they  did  in  the  earlier  part  of  the 
ninth  decade,  when  the  immense  amount  of  unoccupied  lands,  existing  in  the  plain  and 
raounlaia  regions,  enabled  them  to  swamp  ihe  cattle  business  and  bury  its  devotees  undei 
an  avalanche  of  low-priced  animals.  Such  conditions,  however,  can  never  again  obtain 
as  unoccupied  areas  do  not  exist  permitting  any  such  increase  in  the  relative  number  ol 
cattle.  Indeed,  from  this  day  forward  there  is  abundant  reason  to  believe  that  the  ratio 
sf  cattle  to  people  will  constantly  lessen  and  the  cattle  business  become  very  profitable  to 
the  farmer. 

Nor  can  you  take  tlie  dairy  pastures  and  convert  them  into  grain  fields,  as  the  mo- 
ment you  do,  and  reduce  the  number  of  milk  cows  to  less  than  230  to  1,000  people,  that 
moment  the  price  of  milk,  butter  and  olieese  will  mbunt  skyward  and  grain  fields  will  b« 
converted  into  meadows  and  dairy  farms. 


80  AN   OPEN   LETTER. 

For  eanh  1,000  units  added  to  llio  population  we  must  add  230  milkcowa  andagiven 
number  of  horses,  and  but  for  tlie  surplus  of  beeves  now  existing  we  should  have  to  add 
600  to  530  cattle  (other  tbau  milk  cows)  and  for  every  cow,  steer  or  horse  added  we  must 
add  from  six  to  seven  acres  to  our  farms,  and  of  this  from  two  and  a  half  to  three  acres 
must  be  in  pasture. 

Instead  of  converting  pastures  into  grain  fields  we  miist  add  to  such  pastures  in  a 
definite  ratio,  and  having  now  more  wheat  land  than  is  required  to  meet  the  demands  of 
our  own  people  we  shall  take  these  surplus  wheat  fields  and  grow  thereon  the  corn,  hay, 
oats,  rye,  barley,  buckwheat  and  potatoes  required  at  hilme  as  well  as  the  tobacco  and 
cotton  we  consume  and  export,  and  when  all  the  land  that  is  now  iu  cultivation,  and  that 
will,  in  the  meantime,  be  brought  into  cultivation,  is  employed  in  i)roducing  the  food, 
provender  and  materials  of  manufacture  wbich  our  people  require — as  it  will  be  not  later 
than  1896— we  must  either  cease  to  export  cotton  and  grow  grain  upon  the  cotton  lands, 
lower  the  standard  of  living,  or  import  food. 

Such  is  the  relationship  between  population  and  the  production  of  staples  that  there 
is  but  one  crop  we  can  reduce  the  area  of,  for  more  than  one  year,  and  that  is  wheat. 

It  is  true  that  we  now  have  about  2,000,000  acres  more  of  corn  land  than  is  required 
by  the  existing  population,  but  population  will  certainly  overtake  tliecorn  fields  not  later 
than  18i)3,  and  in  all  probability  iu  1892,  and  tben  we  must  either  reduce  the  per  capita 
consumption  of  corn  or  convert  wheat  lands  into  corn  fields. 

When  I  say  there  is  now  2,000,000  acres  surplus  corn  acreage,  I  mean  that  (he  pro- 
duct of  this  two  million  acres  now  r/ocs  abroad  in  the  form  of  grain,  meat  and  dairy 
products,  and  that  not  later  than  1S93  or  1894  we  shall  consume  at  home  every  pound  of 
such  product  made  from  an  average  crop  of  corn  unless  we  shall  tben  have  converted  a 
part  of  the  wheat  lands  into  corn  fields,  a«  the  additions  made  yearly  to  our  population 
necessitate  an  addition,  annually,  of  1,800,000  acres  to  the  corn  fields. 

Etisling,  as  there  does,  an  exact  relationship  between  population  and  all  the  staple 
products  of  the  farm— such  ratio  varying  only  as  varies  the  standard  of  living — when  we 
can  determine  the  proportions  of  this  relationship  we  can  estimate  the  acreage  and  pro- 
duct required  with  just  as  much  certainty  as  a  finance  minister  can  estimate  the  amount 
of  reven  ue  from  auy  impost. 

Having  ascertained  that  the  average  yield  of  wheat,  for  a  period  of  ten  years,  is  12.1 
bushels  per  acre,  and  that  the  annual  consumption  has  been  5.73  bushels  per  capita,  we 
are  able  to  say  that,  with  average  yields,  each  unit  of  the  population  requires  0.48  of  an 
acre  in  wheat,  and  knowing  the  population  and  the  rate  at  which  it  is  increasing,  we  can 
assume  that  there  will  be  over  70,000,000  people  inhabiting  the  United  States  in  1895  aud 
that  tliey  will— with  an  average  yield— require  the  product  of  nearly  34,000  000  acres  in 
wheat,  and,  applying  the  same  process  to  each  of  the  other  farm  staples,  we  determine 
that  they  will  require  83,300,000  acres  in  corn,  27,300,000  acres  iu  oats,  44,800.000  acres  in 
hay,  10  ."JOO.OOO  acres  in  barley,  rye,  buckwheat,  potatoes  and— including  that  exported— 
21,700,000  acres  in  cotton,  ma'^iug  a  total  of  over  221,000,000  acres. 

If  we  can  determine,  approximately,  the  area  which  will  then  be  in  cultivation — 
and  I  hold  we  can— we  can  then  say  how  much  in  excess  or  how  much  short  of  current 
domestic  needs  our  products  will  be  with  average  yields,  and  this  is  what  I  have  attempted 
to  do  in  Exhibit  1  of  the  "Epitome"*  sent  you,  and  this,  with  the  world's  (well  ascer- 
tained) deficient  wheat  and  rye  acreage,  and  which  it  will  be  wholly  impossible  to  make 
good  and  then  have  such  acreage  keep  pace  with  the  increase  in  population,  cause  me  to 
believe  that,  not  later  than  1896,  any  acre  of  land  in  the  United  States  that  will,  without 
more  than  the  average  cost  for  fertilization  and  cultivation,  produce  average  crops  of  food, 
forage  or  fiber  will  sell  readily  for  one  hundred  golden  dollars. 

In  this  connection  permit  me  to  say  that  I  have  but  just  returned  from  a  journey 
through  Illinois,  Iowa  and  the  other  grain-growing  States,  and  when  in  Iowa  was  a.ssured 
by  farmers,  merchants  and  bankers  that  the  selling  price  of  Iowa  farms  had  advanced 
fully  2i  pL'rcent.  within  a  twelve  month  with  the  demand  brisk  at  the  advance,  and  I 
found  similar  conditions  obtaining  iu,Illinoia  and  the  othrt-  great  food-producing  Slates. 
"sice  "EDilome  of  the  AKilcullJir.al  Situatloi^"  following  page  24. 


THE  MARKET  WRECKER— A  MENACE. 

The  one  menace  to  the  prosperity  of  the  American  farmer  is  tlie  practice  of  short- 
selling  (or  option  dealing)  upon  the  "Boards  of  Trade." 

In  order  to  so  discuss  option  dealing,  or  the  short  selling  of  farm  products,  that  the 
reader  may  understand  what  is  the  writer's  conception  of  the  term,  it  will  be  best  to  illus- 
trate by  saying  tliat  ou  September  SOth: 

"A"  contracts  to  sell  and  deliver  and  "B"  to  receive  and  pay  for  10,000  bushels  of 
the  speculative  grade  of  wheat  at  $1.00  per  bushel,  delivered  at  seller's  option  in  Decem- 
ber. There  are  also  forms  of  option  dealing  which  boards  of  trade  do  not  recognize  as 
reguUr,  but  wink  at,  such  as  "puts  and  calls,"  and  a  process  obtains  called  "ringing  out" 
whereby  a  vast  majority  of  deals  are  daily  settled  by  a  kind  of  clearing  house  operation 
without  any  intention  or  semblance  of  delivery. 

Under  the  contract  supposed  "A"  has  the  "option"  of  delivering  the  amount  of 
wheat  named  at  such  time  during  the  month  of  December  as  he  may  elect,  the  term 
"option"  having  reference  solely  to  the  time  when,  during  the  month  named,  the  seller 
maj' declare  the  contract  matured,  but  not  one  contract  in  ten  thousand  is  ever  carried 
into  effect  by  the  delivery  of  property,  it  being  a  matter  of  common  notoriety  that  in 
9,999  out  of  every  10,000  such  transactions  "A"  neither  owns  nor  expects  to  own  the 
grain  he  contracts  to  sell  and  deliver,  nor  does  "B"  expect  to  receive  the  wheat  he  has 
entered  into  a  contract  to  receive  and  pay  for,  the  tacit  understanding  being  that  should 
the  price  of  wheat,  at  maturity  of  contract,  have  advanced  to  $1.05  per  bushel,  "A"  shall, 
instead  of  delivering  to  "B"  10,000  bushels,  pay  him  the  ditTerence  between  the  then 
market  price  and  the  contract  price,  which  being  5  cents  per  bushel.  "A"  pays  "B" 
1500.00.  On  the  other  hand,  should  the  price  have  declined  5  cents,  "B"  would  settle  the 
deal  by  paying  "A"  $500.00. 

In  all  time  cont»iicts  entered  into  upon  Boards  of  Trade  (and  this  term  is  used  to 
designate  all  exchanges  where  such  contracts  are  made),  with  very  rareexceptions,  neither 
seller  nor  buyer  own  or  expect  to  own  a  single  pound  of  the  commodities  in  which  they 
pretend  to  deal;  nor  do  they  contemplate  the  delivery  or  receipt  of  such  commodities,  but 
each  hopes  the  price  will  turn  in  his  favor  and  enable  him  to  win.  Thus  the  transaction 
bears  the  same  relation  to  commerce  as  does  a  wager  upon  a  horserace,  the  only  difference 
being  that  in  one  case  a  definite  sum  is  at  stake,  while  in  the  other  the  wager  is  an  in- 
definite one  that  the  price  of  wheat  in  some  future  month  will  vary  from  a  stated  sum, 
the  amount  of  the  wager  being  measured  by  such  variation,  and  the  winning  party  is 
determined,  not  by  supi)ly  and  demand,  but  by  as  incalculable  a  contingency  as  the  pre- 
ponderance of  the  "bull"  or  "bear"  element  when  the  contract  matures. 

After  the  making  of  sucli  a  contract,  "A"  is  short  on  December  wheat  and  is  des- 
ignated as  a  "bear,"  and  "B"  is  long  on  December  wheat,  and  is  classed  as  a  "bull." 

As  nine-tenths  of  the  time  more  option  dealers  are  interested  in  depressing  than 
in  advancing  prices,  the  weight  and  influence  of  the  speculative  body  is  almost  continu- 
ally exerted  in  depressing  prices.  First  comes  the  constitutional  bear,  who,  from  long 
habit  of  thought  or  a  pessemistie  mental  tendency,  has  come  to  believe  prices  are  always 
too  high;  then  the  professional  bear,  who,  knowing  it  is  easier  to  depress  than  advance 
prices,  sells  below  the  current  price  property  he  does  not  own,  and  whose  winnings  de- 
pending upon  lower  prices,  exerts  all  his  ingenuity  in  exaggerating  the  extent  of  the 
supply  and  fabrication  of  sueh  reports  of  failures,  panics,  stringent  money  markets  and 
the  great  breadth  of  and  favorable  conditions  surrounding  the  growing  crops  as  will  tend 
to  cause  the  "longs"  to  become  pLinic  stricken  and  throw  their  holdings  on  the  market 
and  thus  depress  prices  to  a  point  that  will  enable  him  to  win.  Next  comes  the  specu- 
lator, who,  being  convinced  prices  are  too  low  and  must  advance  greatly,  intends  to  profit 
by  the  expected  rise,  but  being  "out  of  the  mafket"  and  desiring  to  get  in  a«  cheaply  as 
possible,  becomes  an  active  and  unscrupulous  bear,  exerting  himself  to  the  utmost  to  de- 
press prices  that  he  may  buy  the  more  cheajily  and  increase  his  margin  of  winnings. 
Thus  the  efforts  of  nearly  all   the  devotees  at  this  singular  commercial  shrine  work  for 


32  THE   MARKET   WRECKER— A    MENACE. 

lower  prices,  being  effectiiMlly  aided  by  a  constant  fear,  on  the  partof  holders  of  contracts, 
that  prices  will  recede  and  entail  loss. 

The  bears  act  upon  the  knowledge  that  men  can  be  terrorized  into  selling,  and  any 
improbable  tale  of  disaster  will  have  an  intlueuce;  hence,  when  they  raid  the  market  the 
Rir  is  thick  with  rumors  of  failures,  panics  and  wide-spread  comnmrcial  disaster,  conpUd 
with  the  offering  in  a  single  day  of  more  grain  than  there  is  in  tlie  country,  the  result 
being  that  the  bull  becomes,  in  turn,  nervous,  timid  and  then  panic  stricken,  and  being 
unable  to  respond  to  a  call  for  increased  margins,  throws  his  grain  overboard,  adding 
greatly  to  the  swelling  tide  and  helping  to  further  depress  the  price.  These  immense 
offerings  result  in  di.sastrous  effects  upon  prices  and  the  prosperity  of  the  producer,  the 
prices  for  whose  products  are  fixed  by  these  operations. 

"A."  among  thousands  of  others,  having  contracted  to  deliver  what  he  does  not 
own  and  is  unable  to  buy,  except  at  a  price  greater  than  that  at  which  he  has  agreed  to 
sell,  resorts  to  all  conceivable  devices,  falsehoods  and  misrepresentations  to  break  the 
market  and  so  cheapen  products,  before  the  maturity  of  his  contract,  as  to  leave  i  differ- 
ence in  his  favor,  or  that  will  enable  him  to  buy  a  like  amount  of  speculative  grain  at  a 
price  lower  than  that  named  in  his  contract  with  "B." 

What  with  multitudes  of  bears,  with  contracts  maturing  and  a  contingent  of  bulla 
anxious  to  "get  in  on  breaks,"  an  immense  majority  of  speculators  are  ever  working  for 
low  prices  and  offering  hundreds  of  millions  of  fiat  products,  and  with  each  drop  in  price 
having  a  profit,  inulti))ly  the  offerings,  such  additional  tenders  further  depressing  pricesi 
and  thus  without  possessing  a  pound  of  the  product  offered  these  men  are,  by  one  round 
in  the  grain-pits,  able  to  depreciate  in  value  the  entire  grain  products  of  the  couutr3', 
such  depreciation  sometimes  representing  a  large  part  of  the  year's  earnings  of  millions 
of  farmers. 

How  different  is  the  course  of  the  legitimate  dealer  owning  or  haviug  the  means  of 
producing  the  commodities  offered  for  sale.  All  his  efforts  are  directed  towards  securing 
good  prices,  steadiness  in  demand  and  freedom  from  rapid  and  wide  oscillations  in  values. 
The  seller  who  is  an  owner  of  property  never  depreciates  it  value,  nor  does  he  depress 
prices  by  offerings  of  impossible  quantities  which  it  would  be  impractible  to  deliver. 

On  the  other  hand,  the  market  wrecker  is  such  an  exceptional  product  of  civiliza- 
tion, and  short  selling  such  a  singular  commercial  method  that  dealer  and  method  are 
alike  unique,  being  the  only  person  and  method  ever  engaged  in  systematically  depreciat- 
ing what  the  person  proposes  to  sell,  by  such  method;  and  such  phases  of  option  dealing 
and  Board  of  Trade  methods  are  not  inaptly  characterized  in  the  following  paragraph 
from  the  Chicago  Herald: 

"The  trouble  with  the  Board  of  Trade  seems  to  be  that  instead  of  being,  as  it  ought 
to  be,  a  body  of  intelligent  merchants  devoted  to  the  advancement  of  legitimate  business 
and  an  intelligent  study  of  questions  affecting  the  control  of  the  products  of  the  West 
and  their  direction  to  the  Chicago  market,  they  seem  to  have  reached  the  level  of  a  body 
of  mere  speculative  "scalpers,"  living  off  the  I'artiiiM',  producing  nothing  and  In  no  sense 
contributing  by  their  industry  to  the  general  good." 

Nothing  could  be  more  destructive  of  the  interest  alike  of  producer  and  legitimate 
dealer  than  the  practices  now  obtaining  on  the  Boards  of  Trade  where  for  each  unit  of 
any  actual  product  sold  and  delivered  hundreds  of  thousands  of  fictitious  units  are  offered 
at  prices  sometimes  one  to  fifteen  per  cent,  below  the  price  obtaining  for  actual  product, 
owing  doubtless  to  the  fact  that  the  mill  has  not  been  invented  which  will  convert  fig- 
ments into  merchantable  flour.  Such  practices  result  in  abnormal  and  excessive  fluctua- 
tions in  values — fluctuations  so  rapid  as  to  bewilder  those  on  the  spot,  as  is  shown  by  a 
recent  Chicago  market  report  in  the  statement  that: 

"The  uncertainly  witli  which  the  market  moved  yesterday  maybe  illustrated  by 
an  incident.  One  trader  huving  purchased  25,000  1  u.«hels  December  wheat  at  $1  02| 
stepped  out  of  the  pit.  ITe  liad  Ijoen  out  but  a  moment  when  he  heard  a  great  hubbub, 
rushed  in  under  the  impression  that  the  market  was  dropping  on  him,  frantically  inquired 
the  price,  was  told  it  was  "seven-eights,"  sold  his  wheat  at  that  price,  and  was  cursing 
his  luck  over  a  loss  of  "threej-eighths"  when  he  heard  the  remark  that  it  was  a  quick 
"bulge"  and  learned  it  was  II.O-IJ  instead  of  ?l,01-a  and  that  he  had  a  profit  of  two  and 
five-eighths  instead  of  a  loss." 


THE  Market  wrecker— a  menace.  33 

Such  conditions  could  not  ol)tain  were  men  dealing  in  products  instead  of  lictions, 
as  an  iininense  capital  would  bo  involved  instead  of  insignificant  margins  uud  callow 
youlbs  could  not  sell  millions  on  a  capital  of  a  few  hundred  dollars.  „ 

Such  llnctuations  inevitaljly  destroy  legitimate  grain  bu.>ing  for  the  jjui^ose  of 
holding  for  profit,  whereas  a  few  years  since  nii-n  could  be  found  at  every  village  in  the 
producing  districts  who  stored  grain  for  an  advance.  Now,  however,  the  buyer  is  so 
thoroughly  impressed  with  the  danger  arising  from  these  fluctuations  that  he  hastens  to 
sell  his  grain  as  soon  as  bought,  and  when  shipping  takes  the  precaution  to  sell  to  arrive, 
using  the  wire  to  effect  .«aies,  afraid  to  trust  the  market  for  a  single  day. 

So  completely  is  the  producer  and  distributor  at  the  mercy  oftho.se  selling  mere 
figments  that  '-he  packer  daily  buying  a  thonsand  hogs,  the  products  from  which  require 
months  to  cure,  is  forced  to  seek  protection  against  e.xcessive  fluctuation  by  selling  for 
future  delivery  an  amount  of  product  equal  to  that  from  the  hogs  bought,  and  thusguard 
against  a  possible  loss  resulting  from  fluctuations  which  the  exercise  of  no  amouut  of 
sound  judgment  will  enable  the  business  man  to  measure,  as  none  can  measure  the  vaga- 
ries of  a  pit  full  of  frantic  speculators  whose  operations  areas  devoid  of  business  delibera- 
tion as  of  commercial  morality. 

The  following  telegram  but  faintly  describes  a  scene  in  the  provision  pit,  a  scene 
well  worthy  the  pencil  of  a  Hogarth: 

"The  provision  pit  on  the  Board  of  Trade,  which  has  been  almost  deserted  for  sev- 
eral weei(s,  has  been  filled,  since  the  opening  of  the  Hoard  this  morning,  with  a  Irantic 
crowd  of  yelling  betters.  As  soon  as  the  Board  opened  it  became  ruuioied  that  there  was 
a  "corner"  in  pork  in  contemplation,  and  a  wild  scramble  of  shorts  to  cover  followed." 

There  is  not  an  article  that  has  known  the  blighting  touch  of  the  market-wrecking 
short  seller  that  it  is  not  hazardous  for  the  legitimate  dealer  to  handle,  and  grain  is  made 
a  veritable  shuttle-cock  of  by  a  body  of  men  the  majority  of  whom  are  known  by  the 
suggestive  title  of  "scalpers"  and  whose  entire  capital  is  barely  sufficient  to  buy  a  Board 
of  Trade  men.bership,  or  "margin"  a  purchase  or  two  of  fiat  grain,  and  yet  the  Chicago 
Board  of  Trade,  in  its  memorial  to  Congress  opposing  the  passage  of  the  Butterworth 
bill,  says: 

"The  passage  of  this  bill  and  its  enforcement  as  a  law  would  produce  a  commercial 
convulsion  amounting  to  a  national  calamity.  It  would  be  a  vital  attack  upon  the  vi-iy 
foundation  principles  of  modern  business  methods  and  usages.  Itwould  lie  hostile  to  I  he 
commercial  genius  and  spirit  of  the  age.  It  won!  d  destroy  a  vast  system  for  the  economical 
handling  of  the  agricultural  products  of  the  nation;  asystem  which  is  in  entire  harmony 
with  the  progress  of  our  civilization  and  whicli  is  a  part  of  that  civilization.  It  would 
disastrously  disturb  tninsportation  interests  of  every  kind,  and  it  would  in  many  ways, 
directly  and  indirectly,  react  injuriously  upon  the  farnK-r,  and  that  by  the  jjassage  and 
enforcement  of  the  proposed  law  the  farmer  will  be  bereft  of  a  market  for  his  products." 

Sucli  assertions  leave  the  onus  of  proof  with  the  proponents,  but  a  thorough  ex- 
amination of  the  memorial  fails  to  disclose  a  single  fact  in  support  of  such  statements, 
while  it  admits  the  pernicious  character  of  option  dealing  and  favors  itssuppression  when 
carried  on  in  bucket  shops,  where  methods  identical  with  those  obtaining  upon  the  Boards 
of  Trade  are  in  vogue.  Hence  the  layman  naturally  believes  the  bucket  shop  no  worse 
than  the  Board  of  Trade,  and  the  Board  of  Trade  enmity  to  the  bucket  shop  to  be  the 
outgrowth  of  rivalry  iu  business.  The  bucket  shop  being  the  logic;d  corollary  of  option 
dealing.  When  option  sales  cease  on  Boards  of  Trade  the  bucket  shop  will  cease  to  exist. 
Aside  from  its  postulates  the  memorial  is  compounded  in  about  equal  parts  of  so 
phiBticatious,  pretended  solicitude  for  the  farmer  and  special  pleadings  for  the  continu- 
ance of  a  system  which  the  judgment  of  the  people  condemn  and  the  abolition  of  which 
would  not  cause  even  a  ripple  upon  the  stream  of  trade  much  less  commercial  convulsion. 
When  we  reflect  that  only  cotton,  grain,  hog  products.  cofTee  and  petroleum  are  the 
subject  of  option  sales,  while  thousands  of  other  commodities  are  readily  bought  and  sold 
without  the  factitious  aid  of  the  market  wrecking  option  dealer  and  have  thus  far  escaped 
the  blighting  eflfectsof  board  of  trade  methods  and  that  the  natural  relation  of  supply  and 
demand  determines  the  price  for  nearly  all  such  articles,  one  cannot  but  hope  that  Con- 
gress will,  by  the  enactment  of  an  effective  measure,  relegate  the  staples  subject  to  board 
of  trade  manipulation  to  such  commercial  methods  as  suDBce  for  all  other  commodities. 


•  I'-nnr 


OV  TBS 


34 


THE  MARKET  WRECKER— A  MENACE. 


Outside  of  New  York,  boards  of  trade  furnish  no  information  as  lo  the  extent  ot 
option  sales,  but  they  are  prodigious  and  exceed  the  entire  product  so  dealt  in  many 
thousand  times,  while  the  •' offerings"  which  do  not  mature  into  even  option  sales,  are 
hundBds  of  times  as  much  as  the  option  sales,  and  it  is  these  limitless  offers,  as  much  as 
sales,  which  depress  prices.  If  salts  were  confined  to  actual  commodities  and  delivay 
neccssarilij  followed  maturity  of  contract,  offers  ivould  be  limited  by  the  ainount  availaOlt 
for  delivery.  Now,  however,  it  is  not  unusual  for  as  much  fiat  wheat  to  be  sold  in  a  day 
as  there  is  of  actual  grain  received  in  a  year.  For  instance:  On  the  14th  of  April,  1890, 
New  York  specnlators  sold  44,000,000  bushels  of  fiat  wheat,  probably  more  than  twice  as 
much  as  reached  that  city  during  the  year.  While  the  "offerings"  in  a  single  day,  at 
either  Chicago  or  New  York,  are  said  to  often  exceed  300,000,000  bushels,  such  oflTeringa 
having  the  intended  effect  of  depressing  prices.  Although  there  is  no  means  of  determ- 
ining the  volume  of  such  offerings  or  sales,  yet  we  can  get  some  idea  from  a  few  days  op- 
tion sales  of  wheat  and  cotton  at  New  York,  as  set  forth  In  the  following  table: 

SALES  AT  NEW  YORK. 


WHEAT. 


1890. 


Aprils 

April  9 

April  12 

April  14 

September  3... 
September  4... 
September  lo. 

October  22 

October  23 

October  24 


Sales  of  Ac- 
tual Wheat 
Bushels, 


Bushels. 


63,000 

54,000 

1,800 

6,000 

8,000 

32,000 

62,000 

12,000 

64,000 

35,000 


Total., 


I 


337,800 


Option  Sales 
of  Fietit 
ousAVheat 
Bushels. 


Bushels. 


COTTON. 


„  ,  ,  ,  Option  S.'ilor 
Sales  of  Ac-  Jf  j-jc ; ,  i. 
lual  Cotton.        ous  Coti.-n. 


Bales. 


18,400 
2,000 
10,080 
44,000 
8,000 
6,400 
7,240 
4.(100 
3,000, 
4,600 


.00(1 
,00(t 

000 
,000 

000 
,000 

000 

000 
,000 

000 


Bales. 


125,720.000 


369 


1,.586 
518 
328 
405 


3.206 


86,600 
150  200 

81,700 
120,100 

90,600 
155,80a 


684,000 


This  table  shows  that  during  the  days  named,  that  for  each  bushel  of  wheat  sold 
Now  York  market  wreckers  sold  372  bushels  of  liat  grain,  and  for  each  bale  of  cotton  213 
fictions,  and  that  it  would  require  bid  36  days  for  them  to  sell  options  equaling  in,  amount 
an  average  wheat  crop  and  66  days  to  sell  all  the  cotton  grown  in  a  year. 

RECEIPTS  AT  CHICAGO. 


FARM  PRODUCTS. 

FARM  PRODUCTS. 

THB  SUBJECT  OF  OPTICS  SALES. 

WHICH  ARE  NOT  SOLD  AT  OPTION. 

Bbls  .  Bushels 
and  Lbs. 

Value. 

Bbls.,  No,  Lbs. 
and  Tons. 

Value. 

Wheat 

13,348,069 
74,208,908 
52,184,878 

2,767.571 
12,387.526 

4  403  9fis 

$  12.094,000 
33,395,(100 

Flour 

6,1.33,H08 

2,707,627 

4,921,712 

1,575,(114 

.55,333 

105,402,121 

52,611, (ISO 

98,820,817 

30,517,.316 

325.000 

$  80,668,000 

Corn 

Cattl->* 

116,619.000 

Oats 

15,655  000 

54,222,000 
6,000,000 
5,000,000 

Rye 

Barlev 

1,660,000 
7,432,000 
6,071,000    i 
4,500,000    ! 
17,945.000 
11,760,000 
6,100,000 

Sheei) 

Hor.«es  

Butter 

Flax  Seed 

21,180,000 

Grass  .Seed...]          1,500,000 
Barrel  Pork..               .54  451 

Chec-e 

Hides 

4,735,000 
8,000,000 

146,728,592 

70,.885,797 

Wool 

6,500,000 

Lard     

Hav 

3,500,000 

•* 

Total  values.. 

$106,612,000    il                         -1 

$256,324,000 

•Including  calves. 


THE  MARKET  WRECKER— A  MENACE.         35 

That  f.irm  products  c^n  be  readily  marketed  without  the  aid  of  option  sales  is  made 
manifest  in  the  foregoing  table  conipilod  from  the  report  of  the  Chicago  Board  of  Trade 
which  table  shows  that  of  $3(i.'>,000,000  worth  of  staple  farm  products  shipped  to  and 
thronu'li  Chicago  in  1888,  but  29.3  i)er  cent,  were  articles  subject  to  option  sales,  while  70.7 
per  cent,  were  sold  without  aids  which  the  Boards  of  Trade  would  fain  have  us  believe 
are  necessary  to  the  farmer's  continued  existence. 

The  market  wreckers  lay  great  stress  upon  the  difHculty  of  selling  grain  by  sample, 
stating  such  to  be  the  alternative  in  case  purely  speculative  contracts  are  prohibited,  but 
sample  sales  would  be  no  more  common  than  now,  as  as  all  grain  below  grade  is  sold  by 
sample,  as  is  much  of  the  grade  grain  sold  for  cash, and  grain  will  continuetobe inspected 
and  sold  by  grade;  still,  if  necessary,  the  $12,000,000  worth  of  wheat  reaching  Chicigo 
could  be  sold  by  .sample  as  readily  as  the  iS21, 000,000  worth  of  butter,  ascould  the  $15,000,- 
000  worth  of  oats  as  well  as  the  •fH, 500,000  worth  of  hides  and  wool,  each  hide  and  fleece 
being  subject  to  separate  inspection,  as  is  every  package  of  butter,  while  grain  is  inspected 
and  sampled  by  car  loads. 

To  the  $256,000,000  in  value  of  farm  products  shown  to  be  exempt  from  option  sales 
should  be  added  at  least  $50,000,000  worth  of  diessed  beef  and  hogs,  milk,  poultry,  eggs, 
fruit,  vegetables  and  vast  quantities  of  other  products  of  the  iarm  marketed  at  or  through 
Chicago,  justifying  the  assumption  that  of  the  farm  products  reaching  the  great  market, 
fully  three-fourths  enter  into  consumption  without  assistance  from  this  peculiar  commer- 
cial method. 

The  report  of  the  Chicago  Board  of  Trade  for  1888  shows  that  during  the  five  years 
ending  with  1888,  there  was  grown  11,040,000,000  bushels  of  wheat  and  corn,  of  which 
1,077,000,000,  or  9.8  per  cent.  only,.reached  the  eight  interior  Board  of  Trade  markets  and 
much  of  this  was  counted  twice,  as  grain  is  shifted  from  one  such  market  to  another,  and 
Chicago  and  other  cities  include  in  their  receipts  the  produce  in  transit.  The  grain  reaclr 
ing  the  seaboard  markets  cannot  be  counted  as  it  has  been  included  once,  if  not  twice,  at 
interior  pohits,  hence  it  follows  that  Boards  of  Trade  aid  to  the  extent  of  'ins  thantcn 
per  cent,  in  marketinq  farm,  products,  and  granting  the  substantial  correctness  of  estimates 
by  an  eminent  merchant — who  yearly  distributes  millions  of  dollars  worth  of  farm  pro- 
ducts to  commerce — "that  the  eflf'ect  of  option  sales  is  to  reduce,  by  more  than  ten  per 
cent.,  the  value  of  all  grain,  cotton  and  swine  grown,  and  that  in  the  past  ten  years  the 
farmers  of  the  United  States  would  have  received  $1,000,000,000  more  for  their  products 
had  not  short  selling  become  a  prominent  and  profitable  method  of  fixing  values." 

The  farmer  would  be  the  gainer  if  every  Board  of  Trade  and  the  option  dealing 
market  wreckers  were  sunk  at  the  bottom  of  the  sea  and  9.8  per  cent,  of  his  grain  and 
cotton  was  permitted  to  rot  in  the  field,  thereby  saving  the  cost  of  harvesting  ;iud  mar 
keting  that  percentage  while  the  remainder  would  sell  for  more  than  would  the  whole  if 
subjected  to  the  baleful  touch  of  the  market  wreckers;  hence  it  cannot  work  a  hardship  to 
the  producer  to  be  bereft  of  the  option  dealer's  market. 

If  90.2  per  cent,  of  the  grain  grown  and  75  per  cent,  of  all  farm  products  reaching 
the  large  cities  can  be  readily  sold  without  being  madefoot-balls  of  by  bands  of  speculators 
why  not  the  small  remainder? 

If  the  27,000,000  bushels  of  whe.at  which  reached  Chicago  during  the  year  in  the 
form  of  flour  could  be  readily  and  ecouomically  handled  without  being  made  the  subject 
of  option  sales,  why  not  the  13,000,000  bushels  which  reached  the  same  market  in  its 
primary  form? 

If  Chicago  can,  without  the  aid  of  option  dealers,  furnish  buyers  for  $54,000,000 
worth  of  pork  in  the  form  of  swine,  why  should  it  be  essential  to  the  farmer's  prosper- 
ity that  the  $26,000,000  worth  In  secondary  form  should  be  subject  to  the  option  dealer's 
manipulation? 

It  is  readily  seen  why  flour  and  swine  eBcape  the  direct  touch  of  the  market  wreck- 
ers.    The  moment  wheat  is  converted  into  flour  and  marked  with  the  miller's  brand,  it  is 
severed  from  the  mass  of  indistinguishable  grain  and  assumes  an  individual  character 
and  the  option  dealer  having  the  hardihood  to  sell  10,000  barrels  of  "Pillsbury'e  Best  * 
short  would  find  himself  at  the  mercy  of  the  miller  owning  such  brand. 


36         THE  MARKET  WRECKER— A  MENACE. 

Yet  the  price  of  flour  is  determined  by  the  option  dealer's  manipulation  of  tht 
wheat  market. 

Although  swine  cannot  be  shipped  to  marlcel,  stored  and  advances  procured,— as 
the  market  wreckers  assure  us  is  necessary  in  order  to  enable  the  farmer  to  market  bii 
products— and  their  inclination  to  run  violently  down  a  steen  hill  prevents  the  option 
dealer  from  including  them  in  his  short  sales,  the  farmer  m  nuges  to  market  his  swine 
(and  other  animals)  quite  as  readily  and  profital^ly  as  he  does  his  grain.  Unable  to  sub- 
ject the  hi)g  to  his  methods,  the  option  dealer  makes  ample  amends  when  the  animal  has 
been  converteil  into  secondary  product,  but  it  is  singular,  that  while  he  sells  pork,  lard 
and  bacon  short,  such  parts  of  the  swine  as  canvassed  ham,  sausage,  pig's  feet,  etc..  must  be 
disposed  of  by  such  methods  as  obtained  in  the  commercial  world  prior  to  the  evolution 
of  the  option  dealer,  and  yet  such  dealer's  pernicious  arts  aCTect  the  market  for  the  animal 
most  injuriously,  as  the  price  of  the  hog  is  directly  related  to  that  for  the  pa<'l;ing-house 
products'  over  which  the  option  dealer  holds  a  sway. 

Aside  from  farm  products,  in  primary  and  secondary  form,  the  s:ilcsof  nierchandise 
in  Chicago, — at  wholesale — during  1888  amounted  to  $437,500,000,  all  of  which  wasi  mar- 
keted withdut  aid  from  the  option  dealer. 

15y  re;isiin  of  its  being  the  largest  market  for  farm  products  and  the  number,  ac- 
tivity ntid  supreme  audacity  of  its  speculators,  Chicago  has  become  the  most  potent  factor 
infixing  the  prices  for  such  Ti)roducta,  and  yet  (hat  city  handles  less  t/ian  four  per  cent, 
of  the  wheat  and  corn  grown,  its  power  in  this  direction  being  out  of  all  proportion  to 
the  volume  of  products  h  ludled,  and  is  directly  attributable  ^to  and  in  exact  ratio  to  the 
enormousqnatititiesof  fictitiiius  St  utr  constantly  pressed  upon  the  market,  and  it  is  the  daily 
offering,  selling  and  buyingoftlie.se  figments,  in  million  on  million  of  units,  that  enables 
a  few  men,  possessed  of  capital  and  credit  sufficient  to  "margin  "  millions  of  such  ficti- 
tious commodities,  to  dominate  the  markets  of  the  country  and  determine  prices. 

If  the  system  which  creates  and  perpetuates  sucli  con  Ulions  is  an  outgrowth  of 
civilization,  no  less  so  arc  lotteries,  dram  shops,  pool  selling  and  anarchism,  but  a  major- 
ity of  citizens  believe  one  and  all  are  excrescences  to  which  the  knife  should  be  applied 
without  liesitation. 

Because  certain  methods  are  the  outgrowth  of  civilization  it  does  not  follow  that 
they  are  benign,  and  there  is  abundent  evidence  that  the  baleful  results  of  option  dealing 
are  incomparably  greater  than  tlioseattending  the  unrestricted  sale  of  lottery  tickets,  as  the 
lottery,  aside  from  its  corruption  of  public  morals,  aflccts  only  those  who  voluntarily  be- 
come its  votaries,  while  Board  of  Trade  dealing  in  fictitious  commodities  is  as  much  a 
game  of  chance  as  is  the  lottery,  and  not  only  debauches  the  morals  of  those  who  actively 
participate,  but  affects  the  prosperity  of  every  cultivator,  as  well  as  that  of  every  one 
having  business  relations  with  him. 

From  the  planting  of  the  seed  until  the  cio])  is  garnered  and  sold,  the  speculator 
pursues  it  with  misrepresentations  which  are  intended  to  and  do  lessen  the  selling  price 
of  farm  products,  but  should  the  making  of  contracts  for  future  delivery,  other  than  by 
owners  or  prt)ducers  of  commodities,  be  prohibited  as  against  public  policy,  the  interest, 
prompting  the  propagation  of  false  reports  would  disappear. 

The  following  from  a  dealer  in  varitable  products  outlines  the  situation: 

"I  am  a  commission  merchant,  receiving  from  the  West  car-loads  of  grain  to  sell. 
For  every  bushel  sold  l)y  actual  shippers  hundreds  are  sold  "short"  by  sijcculators  and  it 
Is  a  fact,  that  almost  all  the  so  called  grain  speculators  in  Chicago  aie  short  .sellers  and  so 
far  from  trying  to  advaui-e  prices  are  constantly  endeavoring  to  depress  them.  A  few 
years  since  Chicago  was  calloLl  a  ])roducers'  market,  but  now  it  it  recogniwii  as  the  great 
bear  market  of  /he  world  with  a  large  m;ijoiity  of  the  dealers  and  a  prepouderence  of  the 
capital  <.f  the  Board  of  Trade  on  the  bear  side."* 

/■•i  it  not  strange,  that  a  city  adjacent  to  the  producing  dist7-icts  and  (he  natural  en- 
trepot for  (he  grain,  produced,  should  be  decrying  the  value  of  xuhat  we  in  (he  West  have  to 
sell,  and  is  it  not  anomalous  that  most  of  the  articles  in  the  press  are  bear  articles,  and 
lastly  is  there  any  other  country,  with  a  surplus  to  sill,  that  is  constantly  trying  to  depress 
the  value  of  that  surplusf 

*  'Oomiiilfsiun  Uerohant"  In  Chicago  Tribune.  January  11 


THE   FARMER,   THE   INVESTOR  AND  THE   RAILWAY. 

Agriculture  li;ivinu;  been  the  first  industry  of  settled  life,  we  may  assume  that  the 
farmer  lias  pursued  his  calling  since  Ihe  dawu  of  civilization;  yet,  necessary  as  have  been 
such  labors,  lie  has  borne  mauy  burdens  from  which  liis  brothers  have  been  exempt, 
doubtless  owing  to  tlie  dilHculty  e.\|ierienced  in  forming  comliinations  with  his  lellowa 
for  concerted  action,  wliile  those  representing  aggregates  of  capital,  being  comparatively 
few  in  numbers,  easily  edect  such  combinations.  This  is  es|)eeially  true  of  llie  present 
era,  and  of  tlioae  controlling  the  great  mass  of  capital  represented  by  the  railways  of  the 
country,  nominally  amounting  to  $9,369,000,000;  and  appearing  to  equal  60  |ier  cent,  while 
being  not  over  30  per  cent,  of  the  capital  invested  in  farms,  yet  the  influence  exerted 
upon  economic  and  other  questions  by  railway  owners  and  farmers  is  in  an  inverse  ratio 
to  their  respective  numbers  and  the  magnitude  of  their  investments. 

One  is  a  compact  force,  disciplined,  alert,  living  in  the  midst  of  the  greatest  activi- 
ties: tlie  other  exceedingly  more  numerous,  undisciplined,  leading  isolated  lives  and  with 
few  incentives  to  quickening  thought. 

Those  familiar  with  the  history  of  the  last  sixty  years  will  not  question  the  great 
benefits  resulting  from  the  construction  of  railways,  or  grudge  the  men  who  have  carried 
forward  these  great  undertakings  a  rich  reward. 

By  the  aid  of  the  railway  the  wilderness  has  been  madeproductive,  countless  farms 
brought  within  reach  of  the  great  markets,  mines  opened,  mills,  factories  and  forges  built, 
towns  and  cities  brought  into  existence  and  populous  Stales  carried  to  a  higher  develop- 
ment than  would  have  been  possible  in  centuries  without  such  aids.  Such  are  but  a  part 
of  the  beneficent  results  flowing  from  the  construction  of  the  railway. 

While  the  builders  of  the  railway  have  been  exploiting  a  continent  and  piling  up 
the  greatest  fortunes  ever  known,  the  farmer  has  taken  an  unproductive  wilderness  and 
literally  hewn  his  way  through  the  great  forests  which  clothed  seaboard  and  central 
region  to  the  open  prairie,  there  developing  the  most  productive  of  States,  continued  his 
toilsome  march  up  the  arid  slopes,  scaled  the  mountains  and  planted  orchard,  vineyard 
and  farm  by  the  shores  of  the  Western  Ocean. 

His  labors  have  enabled  the  nation  to  flood  the  markets  with  a  plethora  of  bread, 
meat  and  fiber;  to  meet  the  enormous  expenditure  of  a  devastating  war;  to  repair  the 
losses  and  havoc  of  those  bloody  days,  and  then  to  turn  the  balance  of  trade  in  our  favor. 
Willingly  has  the  farmer  performed  this  labor,  expecting  to  share  in  the  prosperity 
of  the  country,  yet  not  always  content  with  his  part  of  the  rewards,  and  coming  to  be- 
lieve that  those  controlling  the  carriage  of  his  products  were  exacting  as  toll  more  than  a 
just  proportion  thereof.  He  has  seen  the  carrier  yearly  adding  to  his  property,  building 
new  lines  from  the  tolls  collected  on  the  old,  increasing  his  wealth  and  powerand  leaving 
a  constantly  lessening  proportion  of  the  proceeds  arising  from  the  sale  of  farm  products 
to  the  grower.  As  population  has  increased  railway  property  has  grown  in  relative  value, 
as  has  tlie  power  of  those  controlling  it,  and  this  increase  has  been  very  largely  made 
from  revenues  derived  from  tolls  levied  to  pay  interest  and  dividends  on  the  water  in  the 
bonds  and  shares,  hence  made  at  the  expense  of  railway  users,  a  large  part  of  whom  are 
farmers. 

All  are  fairly  prosperous  except  such  as  are  engaged  in  the  basic  industry  of  civil- 
ization, and  the  one  cloud  in  the  industrial  horizon  is  the  unsatisfactory  condition  of  a 
large  part  of  an  agricultural  population  uuiTiberiug  some  25,000,000,  and  the  railway 
is  chargeable  with  so  much  of  this  as  results  from  the  exaction  of  unjust  tolls,  and  this 
inquiry  is  instituted  for  the  purpose  of  ascertaining  if  the  complaints,  as  to  the  unreason- 
ableness of  such  charges,  are  well  grounded. 

The  highe-it  tribunals  hold  that  railways  are  public  trusts,  and  can  exercise  the 
power  to  enter  upon  and  take  private  property  solely  in  their  public  character;  and  that 
the  exercise  of  such  exceptional  power  can  be  defended  only  upon  the  ground  that  the 
good  of  the  public  can  best  be  subserved  by  a  corporation  under  obligation  to  treat  all 
justly  in  rendering  services  which  each  citizen  cannot  perform  for  himself;  that  the  State 
could  perform  the  functions  delegated  to  railway  corporations,  which  are  trusts  organized 


38    THE  FARMER,   THE  INVESTOR  AND  THE   RAILWAY. 

for  the  service  of  the  public  and  charged  with  remuneration  for  the  private  capital  em- 
ployed; that  the  corporatiops  thus  endowed  must  provide  all  needed  facilities  for  con- 
ducting speedily  the  business  for  which  they  are  created;  and  that  the  charge  for  the 
services  rendered  sliall  be  no  more  than  just  and  reasonable;  and  the  Federal  courts  have 
not  hesitated  to  deteiiuine  what  was  ajust  and  reasonable  charge. 

The  courts  hold  that  rates  lixed  by  the  State  are  prima  facie  reasonable,  and  while 
railway  companies  cannot'be  barred  from  showing  the  unreniu iterative  character  of  such' 
rates,  they  can  only  do  so  by  disclosing — in  addition  to  the  cost  of  maintenance  and 
operation — the  exact  cost  of  the  plant  employed,  and  that  in  arriving  at  such  cost  account 
can  be  taken  only  of  monies  actually  exjjended  in  construction  and  cciuipnieut.  Railway 
companies  have  evinced  no  desire  to  make  disclofures  of  this  character,  although  it  would 
be  easy  in  this  way  to  show  that  the  schedule  of  rates  established  by  the  State  was  unre- 
nnmerative,  if  such  was  the  case. 

The  cost  of  maintaining  and  operating  any  given  railway  is  re.adily  ascertainable, 
and  it  should  be  equally  easy  to  determine  its  cost,  but  such  a  procedure  is  surrounded 
with  grave  difficulties — diflioulties  growing  out  of  syndicates  and  construction  companies, 
tlie  manufacture  of  securities,  of  boi.d  and  stock  waterings,  the  purchase  a)\d  construc- 
tion of  branch  lines  at  low  cost  and  unloading  upon  the  stockholders  at  high  cost,  stock 
and  scrip  dividends,  bonus*  of  stock  to  purchaser  of  bonds,  bonds  sold  to  pay  unearned 
divideuds  that  much  stock  may  be  unloaded  at  high  prices  h.  la  Waliash,  the  hnibiing  of 
branch  lines  at  low  cost,  capitalizing  at  high  cost,  and  covering  resulting  profits  into  the 
treasury  of  the  parent  company  tc  be  distributed  as  dividends,  and  forever  taxing  the 
railway  user  to  pay  ill teresi  and  dividends  on  the  profits  thus  enjoyed,  as  well  as  by  a 
thousand  and  one  other  shady  devices  by  which  water  is  added  to  the  basic  power  of 
levying  tolls  and  increasing  the  amount  upon  which  the  public  is  expected  to  furnish  the 
means  of  paying  interest  and  dividends. 

The  cost  of  the  railway  is  known  only  to  its  managers,  and  rarely  to  them,  as  the 
constructors  but  seldom  retain  the  management  and  railway  accounts  are  manipulated  in 
numberless  peculiar  ways  for  the  sophistication  of  investors.  For  instance,  on  page  184 
of  the  1889  report  of  the  Kansas  Railroad  Commissioners  there  is  appended  to  the  state- 
ment of  bonded  indebtedness,  made  by  the  Atchison,  Topeka  and  Santa  Fe,  this  note: 
"The  early  records  of  the  Company  are  very  incomplete  and  it  is  impossible  to  tell,  with 
any  accuracy,  the  amount  realized  from  the  issue  of  these  bonds,"  i.  <\,  $14,061,500  of 
first  mortgage,  land  grant  and  consolidated  bonds.  Another  typical  case  is  that  of  a  rail- 
way company  in  whose  service  was  the  writer,  and  which  built  a  costly  line  of  passenger 
steamers  for  lake  service;  but,  by  reason  of  the  building  of  railways  north  and  south  of 
the  lake,  the  operation  of  the  line  became  unprofitable,  the  steamers  were  dismantled, 
engines  sold  and  the  great  sum  they  represented  dropped  from  the  annual  report  of  the 
company  without  a  word  of  explanation. 

Managers  dealing  thus  with  stockholders,  are  not  likely  to  be  more  frank  with  the 
public.  Indeed  the  cost  of  the  railway,  and  the  manipulations  of  such  cost,  areof  the  pro- 
fessional secrets  which  are  employed  to  defraud  railway  users  and  investors,  and  a  case  or 
two  in  point  may  not  be  uninteresting,  as  showing  some  of  the  processes  adopted  in  the 
manufacture  and  marketing  of  stocks  and  bonds,  which  are  so  frequently  but  evidences 
of  corporate  fraud,  rather  than  ownership. 

An  illustration  of  the  ease  with  which  investor  and  user  are  alike  plundered  is 
found  in  the  case  of  a  corporation  controlling  a  vuhialile  dividend-paying  proi>erty, 
which  another compan J'  parallels  with  expectation  of  profits  only  from  construction,  and 
by  forcing  a  sale— eventually  efltected— to  the  older  company,  the  result  being  the  trebling 
of  railway  capital   without  an  increase  of  traffic. 

Another  form  of  corporate  fraud  is  the  payment  of  unearned  dividends  from  the 
proceeds  of  bonds  sold,  thus  adding  to  the  capitalization  and  necessitating  the  collection 
of  unjust  tolls  to  pay  interest.  Tliese  fraudulent  payments  are  often  made  to  enable  the 
management    to    foist    upon    the  public    immensu    issues    of    worthless    shares,   such 

*The  .Santa  Fe  and  otbei' companies  have  given  as  a  bunus  as  much  as  ten  shares  of  stocic  with 
each  $1,000  bond  sold. 


TnE   FARMER,  THE   INVESTOR  AND  THE   RAILWAY.     39 

dividends  being  eontiimeil  as  long  us  bonds  can  be  sold  and  a  market  found  for  tbe  stock, 
and  when  one  of  these  bubbles  is  aliout  to  burst,  the  manipulators  make  further  vast 
profits  by  selling  "short"  and  then  liaving  disclosures  made  of  tlie  hopeless  condition  of 
the  corporate  finauces. 

Yet  another  form  of  corporate  fraud  is  the  purchase  or  construction  of  cheap  branch 
lines,  and  selling  them  at  two,  three  or  four  times  their  cost  to  Hie  Company  of  whose 
interests  the  profiting  parties  are  the  trustees.  Sometimes  these  lines  are  consolidated  with 
that  of  the  parent  company  and  new  issues  of  securities  made  to  cover  the  added  mileage, 
while  in  other  cases  the  olil  company  enables  the  schemers  to  sell  immense  issues  of  the 
shares  and  bonds  of  tbe  auxiliary  line  at  bij.'h  prices  by  guaranteeing  the  bonds  of  the 
latter  and  leasing  its  road  at  an  exorbitant  rental.  Loadect  down  in  this  way  the  old 
company  frequently  ceases  to  pay  dividends. 

Again  tbe  parent  comjiauy  re.solves  itself  info  a  construction  company  and  covers 
Into  its  treasury  tbe  profits  arising  from  the  construction  of  cheap  branches.  For  in- 
stance, it  is  shown  on  pane  391  of  the  1SS;»  report  of  the  Kansas  Railroad  Commissioners 
that  the  St.  Louis  &  San  Francisco  Railway  Company  derived  a  profit  of  $07,871  from 
the  construction  of  ten  and  one-half  miles  of  roaJ  that  should  not  have  cost  over  $10,000 
per  mile,  but  which,  with  this  profit  added  and  stock  issued  for  a  nominal  consideration, 
is  capitalized  for  $28,845  per  mile.  This  company  has  built  many  hundred  miles  in  recent 
years,  and  construction  profits  have  aided  in  the  paymentof  dividends  on  preferred  stock, 
while  providing  a  basis  for  levying,  for  all  time,  tolls  to  pay  interest  and  dividends  on  the 
bonds  and  stock  representing  the  profits  divided.  Thus,  the  greater  the  profits  from  con- 
struction, the  greater  the  sums  which  can  hereafter  be  extorted  from  the  user  of  the 
railway. 

^Poor's  Manual  shows  that  to  make  contemplated  extensions  the  stock  of  the  Mis- 
-sonri  Pacific  was,  during  18S6-87,  increased  J15, 000,000,  and  the  funded  debt  1514,376,000, 
and  while  the  capitalization  of  the  parent  company  was  thus  increased  $29,376,000, t  the 
lines  built  or  purchased  were  capitalized  from  $8,000  to  $.'i2,000  per  mile,  the  result  of  such 
multiple  capitalization  being  to  add  an  immense  amount  of  water  to  old  as  well  as  new 
issues.  There  are  some  very  instructive  phases  of  the  construction  of  this  new  mileage. 
For  instance,  the  310  miles  of  the  auxiliary  Fort  Scott,  Wichita  &  Western  is  shown  by 
Mr.  Poor  to  have  cost  |;4,666,000;  the  funded  debt  is  shown  by  Kansas  Railroad  Commis- 
sion  to  be  $5,666,000,  and  Mr.  Poor  shows  that  ^4,666,000  of  such  bonds  are  deposited  with 
tbe  Union  Trust  Comiany  to  secure  |i4,666,000  of  Missouri  Pacific  trust  mortgage  bonds 
issued  to  (irovide  the  $4,6(i6,000  which  the  road  is  said  to  have  cost.  Has  the  user  of  this 
railway  a  right  to  ask  what  became  of  tbe  other  $1,000,000  of  mortgage  bonds  and  the 
$7,000,000  of  capital  stock  upon  which  rates  are  based,  and  which  make  up  a  capitalization 
of  $8,000,000  in  excess  of  cost,  and-what  was  the  consideration  therefor? 

In  the  case  of  the  411  miles  of  the  Missouri  Pacific's  Denver,  Memphis  &  Atlantic 
line,  Mr.  Poor  shows  the  cost  to  have  been  $4,920,000,  and  Kansas  report  shows  bonded 
debt  to  be  $6,561,000,  the  first  mortgage  bonds  exceeding  the  cost  by  $1,641,000  and  the 
entire  capitalization  being  $8,202,000  in  excess  of  cost,  a  large  part  of  which  was  borne  by 
the  municipalities  along  the  line.  Like  conditions  obtain  with  all  Missouri  Pacific  lines 
built  of  late  years  except  two  short  ones  not  yet  mortgaged. 

Another  mode  of  collecting  excessive  tolls  and  defrauding  the  public  is  that  prac- 
ticed by  the  subsidized  Pacific  lines  in  jmying  $900,000  per  annum  to  tbe  Pacific  Mail 
Steamship  (Company  to  forego  competition,  and  then  charging  the  public  two  or  three 
times  this  sum  to  recoup  themselves  for  such  illegal  diversion  of  corporate  funds. 

A  unique  case  is  that  of  an  Ohio  corporation,  where  the  men  who  afterwards  be- 
came the  directors  and  managers  gave  their  notes  lo  certain  bankers  for  money  borrowed 
for  the  purpose  of  buying  the  shares  which  were  to  give  them  control  of  the  corporation, 
aiid,  having  by  this  means  secured  control,  applied — in  whole  or  in  part — to  the  payment 
of  suchnotes  the  first  mortgage  bonds  of  tbe  company  to  the  amount  of -?S. 000, 000,  although 

•"Poor'.s  Man  ii.il"  is  a  compendium  of  such  flnancial  and  traffic  statements  as  tlie  railway  cona- 
p.Tnies  prepare  for  publication. 

tAugust,  1-90    It  is  now  stated  that  the  Missouri  Pacific  has  added  $30,000,000  to  its  capitalization. 


40    THE   FARMER,   THE   INVESTOR   AND   THE   RAILWAY. 

such  bonds  hail,  in  corvipliance  with  the  requirements  of  the  statutes  of  Ohio,  been  issued 
for  the  express  purpose  of  equipuifUls,  double  tracks  and  other  betternients.* 

Many  auxiliary  lines  have  been  built  at  costs  ranging  from  $S.O0O  to  $15,000  per 
mile,  and  capitalized  at  two,  three,  four,  and  even  five  limes  their  cost,  as  in  the  case  of 
the  107  miles  of  the  Kansas  IMidland,  costing,  iucluding  a  small  equipment,  but  $10,200 
per  mile,  of  which  30  per  cent,  was  furnished  by  the  municipalities  along  its  line;  yet 
with  construction  profits  and  other  devices  this  road  shows  a  capitalization  of  $33,000  per 

mile. 

Or  take  the  1,055  miles  in  Kansas  of  the  Chicago,  Kansas  &  Nebraska,  built  by  the 
Chicago  Rock  Island  &  Pacific  in  much  the  same  way  and  capitalized  for  ?.33,000  per 
mile.  Kansas  municipalities  aided  to  the  extent  of  $2,500  per  mile  in  building  this  road, 
receiving  the  stock  of  the  company  in  exchange  for  municipal  bonds.  Now,  however, 
foreclosure  proceedings  are  pending  in  the  interest  and  at  the  procurement  of  the  parent 
company  (which  owns,  practically,  all  the  bonds  and  stock  of  the  auxiliary  line  except 
the  stock  issued  to  the  municipalities)  whereby  the  municipalities  are  to  be  despoiled  of 
this  $2,500,0U0.i 

This  is  no  uncommon  device  for  plundering  the  farmer  and  other  tax-payers;  and 
railway  presidents,  directors  and  managers,  who  would  scorn  to  put  their  hands  into  the 
pocket  of  the  farmer  and  abstract  a  (single)  silver  dollar,  rarely  hesitate  when,  by  the 
devices  described,  they  can  take  from  the  same  farmer  and  his  congeners  a  lump  sum  of 
$2,500,000,  and  the  successful  workers  of  such  schemes,  by  one  and  the  same  act,  acquire 
vast  sums  and  a  reputation  for  great  financial  abilitj'. 

Another  type  is  found  iu  the  Marion  &  McPherson  line  of  the  Atchison,  Topeka  & 
Santa  Fe,t  built  largely  from  old  and  much  worn  material,  and  originally  capitalized  for 
$28,000  per  mile,  being  more  than  three  times  its  cost.  Under  the  recent  re-organization 
of  the  Santa  Fe  each  mile  represents  a  much  larger  sum;  but  how  much  larger  I  am  un- 
able to  ascertain  from  the  accounting  officers  of  that  company,  to  whom  application  was 
made  for  definite  information. 

Other  Santa  Fe  lines  show  peculiar  phasesof  railway  administration.  Forinstance, 
the  Santa  Fe,  .jointly  with  the  St.  Louis  &  San  Francisco,  built  the  Wichita  &  Western, 
extending  125  miles  through  a  sparsely  settled  district  and  not  paying  operatingespenses; 
yet  the  Santa  Fe,  although  having  another  and  parallel  line — the  Southern  Kansas — less 
than  twenty-four  miles  south  of  the  Wichita  &  Western,  doubly  paralleled  itself  by 
building  a  third  line  between  the  two,  this  third  line,  for  one  hundred  miles,  being  eight 
to  fourteen  miles  from  the  Wichita  &  Western  on  the  north,  and,  for  seventy  miles,  but 
ten  to  sixteen  from  the  Southern  Kansas  on  the  south. 

In  this  way  has  money  been  wasted  in  construction,  the  farmer  unneccs'^arily  bur- 
dened, the  parent  company  loaded  with  an  immense  unproductive  mileage,  and  rendered 
unable  to  paj'  fi.xed  charges,  and  thousands  of  those  investing  in  its  securities  reduced  to 
sore  straits,  the  reason  for  all  of  which  is  propably  to  be  found  in  the  profits — private  or 
corporate — growing  out  of  construction. 

Perhaps  the  Santa  Fe  affords  as  fair  an  illustration  as  can  be  found  of  the  ease  with 
which  twelve  men,  sitting  in  directors'  chairs,  cau  issue  an  edict  for  the  creation  of  an 
hundred  million  or  more  of  fiat  property,  the  only  evidence  of  the  existence  of  which  is 
found  in  reams  of  paper,  and  afTording  additional  evidence  of  the  great  and  growing 
utility  of  printer's  ink  as  an  instrument  of  advanced  civilization.  By  this  simple  pro- 
cess, and  without  any  addition  to  the  property  of  the  corporation,  the  liabilities  of  the 
Santa  Fe  have  been  increased  more  than  $100,000,000,  and  while  rates  of  interest  may 
have  been  scaled  down,  the  total  of  interest  and  principal  have  been  scaled  up.  When 
an  individual  or  firm  falls  creditors  usually  accept  large  reductionsof  principal  in  adjust- 
ment; but  when  a  railway  company  like  the  Santa  Fe  fails  they  insist  on  doubling  the 
principal  and  increasing  the  total  of  interest. 

Although  the  earnings  of  the  Santa  Fe,  in   1888,  amounted  to  12,914  529  less  than 

operating  expenses  and  fixed  charges,  the  managers  paid  an  unearned  dividend  off2,625,- 

»See  llic  seventli  .annual  report,  of  tlio  Columbns,  Mookhiff  V.Tlley  A  Toledo  K.nilway  Company, 
flv  hown  as  1  In'  "Atchison"  in  New  England  and  as  the  "Santa  Fe"  lu  the  West. 
jsince  tiie  publication  of  this  article  In  the  ".Vrcna"  the  railway  has  heen  sold  under  decree  ot 
foreclosnre  and  the  municipalities  deprived  of  their  slock. 


THE   FARMER,   THE   INVESTOR   AND   THE   RAILWAY.     41 


;K)0,  which,  with  other  enormous  additions  to  tlie  li;ilnlities,  sire  to  bean  endless  burden 
upon  railway  users  and  the  warrant  Cor  the  exaction  ol'  unjust  tolls. 

The  Santa  Fe's  recently  acquired  control  of  the  St.  Louis  &  San  Franii.-iv'  lines-- 
which  are  to  he  operated  as  a  distinct  properly— is  a  remarkable  instance  of  the  lial  pi..- 
oess  of  multiplying  securities  without  tlie  addition  of  a  dollar's  worth  to  the  world's 
(took  of  property. 

The  St.  Louis  &  San  Francisco  controlled  1,329*  miles  of  railway,  capitalized  for 
the  enormous  sum  of  ?70,402,800,  being  $52,200  per  mile.  The  Santa  Fe  acquired  control 
of  this  property  by  issuing  $::6,lS5,175  of  new  Santa  Fe  stock,  not  to  retire  the  stock  of 
the  "Frisco,"  but  to  buy  it  and  place  it  in  the  treasury  of  tlie  Santa  Fe  and  applyt  such 
.lividends  as  may  accrue  to  the  payment  of  current  Santa  Fe  liabilities. 

The  result  to  the  railway  user  will  be  that,  whereas  the  "Frisco"  property  has  been 
represented  by  ?70, 402,800  of  "Frisco"  and  auxiliary  stocks  and  bonds,  it  is  now  repre- 
sented by  that  sum  plus  $26,285  175  of  Santa  Fe  stock,  which  is  an  addition  of  fictitious 
capital  upon  which  the  user  is  expected  to  furnisli  revenue,  and  the  owners  of  Santa  Fe 
shares  have  that  amount  of  water  iujected  into  their  holdings. 

tThe  Santa  Fe  holds  741,129i  shares,  of  the  par  value  of  $73,112,950,  of  stock  of 
auxiliary  lines  built  wholly  from  land  grants,  municipal  aid,  and  proceeds  of  bonds  sold, 
and  for  this  immense  number  of  shares  the  only  consideration — as  shown  by  the  Santa 
Fe  ledger— was  |4,0::i),  or  a  fraction  over  half  of  one  cent  a  share.  For  663,300*  of  these 
shares,  of  the  par  value  of  $66,330,650,  the  only  consideration  shown  is  $15.00,  being  at 
the  rate  of  44.22  shares  of  the  par  value  of  $4,422.00  for  one  cent.  Such  is  the  stuff 
which  passes  current  as  railway  securities  and  ou  which  the  railway  user  is  taxed  to  pay 
dividends. 

The  Santa  Fe  aflords  a  most  instructive  example  of  what  may  be  accomplished  in 
the  way  of  multiplying  securities  by  the  hoodooing?  of  accounts,  by  reckless  construc- 
tion, the  payment  of  stock  dividends  ($18,000,000),  the  giving  of  vast  quantities  of  stock 
to  the  purchases  of  bonds,  the  payment  of  unearned  dividends  and  the  creation  of  $100,- 
000,000  and  more  of  fiat  securities  at  one  or  two  sittings. 

The  seventy  miles  of  the  Columbus  &  Cincinnati  Midland,  built  at  a  cost  of  about 
$17,000  per  mile— of  which  some  $1,500  per  mile  was  donated  by  the  people  along  its  line 
— is  capitalized  at  $57,000  per  mile  and  earns  nearly  twelve  per  cent,  on  the  money  fur- 
nished by  its  builders,  yet  appears  to  earn  but  three  per  cent.,  while  in  its  immense 
fictitious  capital  the  foundation  is  laid  for  further  exactions. 

The  enormous  profits  accruing  from  the  operation  of  the  construction  company, 
and  the  unjust  tax  thereby  forever  imposed  upon  the  public,  is  exemplified  in  the  case  of 
the  "Credit  Mobilier"  and  other  construction  devices  connected  with  the  building  of  the 
various  Pacific  lines,  out  of  which  grew  no  little  corruption  of  legislators,  the  ruiu,  po- 
litically, of  promising  statesmen,  and  the  amassing  of  so  many  great  fortunes,  typified  in 
the  case  of  the  four  meu  who  built  the  Central  Pacific  and  whose  united  worldly  posses- 
sions in  1860  are  said  tohave  been  but  .•t;120,000.  Now,  however,  their  estates  are  estimated 
at  more  than  $120,000,000. 

Mr.  Poor  states  that  "the  cost  per  mile  of  the  roads  making  returns  (1888)  as  meas- 
ured by  the  amount  of  their  stocks  and  indebtedness  equaled  nearly  $60,732  as  against 
$58,603  for  1SS7,"  being  an  increase  of  .'?2,129  per  mile,  and  at  the  price  recently  prevailing, 
it  would  require  135,000,000  bushels  of  the  farmers'  corn  annually  to  pay  o  per  cent.  <>n 
the  water  absorbed  by  railway  securities  in  one  year,  and  by  such  waterings  yearly  itwill 
take  but  fourteen  years  to  absorb  the  entire  corn  crop  to  provide  revenue  ou  the  added 
fluid.     How  long  shall  this  process  be  permitted  to  continue? 

Mr.  Poor  also  states  that,  in  the  eleven  central  farming  States,  railway  earnings 
have  in  eighteen  years  increased  175  per  cent;  yet  he  forgets  to  tell  us  that  such  has  been 
the  shrinkage  in  the  prices  of  farm  products  that  the  value  of  the  wheat  and  corn  crops 
in  these  States  increased  but  57  per  cent.,  showing  conclusively  that  the  railways  are 

•Incluilesuch  lines  .as  the  Kan.sas  Midland,  etc.,  built  at  costs  ranging  from  $10,000  to  813,000  per  mile. 
tKinaiicial  Chronicle  of  jMay  ai,  leso. 
Jl'oor's  Manual ,  18BU,  page  7;3. 
gAnie,  pu^ea. 


42    THE   FARMER,   THE   INVESTOR  AND  THE  RAILWAY. 

taking  a  constantly  increasing:  proportion  of  the  proceeds  arising  from  the  sale  of  the 
products  of  the  farm. 

This  is  still  more  clearly  shown  on  the  same  page  In  the  statement  that  in  these 
Slates  railvA'ay  revenue  in  1870  was  $12  for  each  unit  of  the  population  as  against  $18  in 
1SS8.     Thus  the  per  capita  transportation  tax  is  shown  to  have  increased  50  per  cent. 

Mr.  Poor  says:  "With  these  facts  before  us,  it  is  difficult  to  understand  the  extraor- 
■dinary  antipathy  to  railroad  corporations  in  the  West." 

If  such  antipathy  exists,  probably  Mr.  Poor  could  understand  it  if  he  would  but 
look  at  these  facts,  and  others  herein  stated,  in  all  their  nakedness,  keeping  in  view  their 
true  bearing  upon  the  greatest  of  the  nation's  industries. 

That  no  such  antipathy  exists  is  shown  by  the  fact  that,  while  the  railways  of  Illi- 
nois are  capitalized  for  142,450  per  mile,  they  are  assessed  for  purposes  of  taxation  ai 
$7,863  per  mile;  those  of  Iowa  are  capitalized  at  $38,069,  and  assessed  at  $5,189;  those  of  Ne^ 
braska  are  capitalized  at  .$40,172,  and  assessed  at  $5,829,  and  thoseof  Kansas  are  capitalized 
at  $52,155,  and  assessed  at  $6,595  per  mile. 

We  have  seen  some  of  the  processes  by  which  the  investor  is  shorn  and  an  enormous 
fictitious  capitalization  piled  up  to  aid  in  taxing  the  farmer  and  others.  Is  it  any  wonder 
that  when  his  wares  are  selling  at  starvation  prices  the  farmer  becomes  restive  under  the 
burdens  thus  imposed  and  .seeks  to  replace  present  ownership  by  that  of  the  nation? 

According  to  Mr.  Poor,  there  existed  156,082  miles  of  railway  at  the  close  of  1888, 
showing  a  capitalization — including  floating  debts — of  $9,367,398,954,  to  pay  interest  and 
dividends  on  which  a  toll  is  levied  on  all  the  industries  of  the  country. 

How  much  of  this  vast  capitalization  is  real,  and  how  much  the  fictitious  outgrowth 
of  the  practices  described? 

Owing  to  the  practices  illustrated,  it  is  impossible  for  railway  companies  to  show 
the  cost  of  their  properties,  and  we  are  compelled  to  reach  an  approximation  by  estimat- 
ing such  cost,  and  thus  determining  the  sum  upon  which  revenue  should  accrue. 

ESTIMATED  COST  FEB  MILE  OF   EXISTING   RAILWAYS. 

Grubbing  and  clearing $  100 

Right  of  way  and  land  damage 2,500 

Earthwork  and  rock  cuttings 4,500 

Bridges,  culverts  and  masonry 3  000 

Ties— 3,000 2,000 

Rails,  splices,  bolts  and  spikes 4,000 

Switches,  side-tracks,  caitle-guards,  road  crossings  and  fences 1,100 

Track  laying,  surfacing  and  ballasting 2,300 

Depots,  water  tanks,  stock  yards,  shops  and  terminals 3,500 

E(iuipment 4,ft0n 

Engineering,  rents,  interest,  taxes  and  contingencies 2,:0) 

Total  cost  per  mile $30,000 

*That  this  estimate  is  more  than  ample  is  assured  by  the  statement  (in  substance)  of 
of  Mr.  H.  V.  Poor  that  the  capitalization  of  the  roads  built  from  18S0  to  1883  is  double  the 
actual  investment  and,  could  the  fictitious  capital  be  eliminated,  railways,  as  investments, 
would  have  no  parallel;  and  in  the  statement  that  within  five  years  ending  in  1683, 
"about  40,000  miles  of  line  were  constructed  at  a  cash  cost  of  at  least  $1,100,000,000,"  being 
$27,000  per  mile;  and  that  "in  1884  only  about  4,000  miles  of  new  line  were  constructed, 
the  cost  of  which  did  not  exceed  $20,000  per  mile  and  perhaps  not  over  $15,000  per  mile." 

For  each  mile  of  railway  costing  more  than  $30,000  per  mile  ten  can  be  found  that 
have  cost  from  $8,000  to  $20,000.  Theeastern  two  hundred  miles  of  the  Kansas  division 
of  the  Union  Pacific,  built  in  the  era  of  high  prices,  cost  less  than  $20,000,  although  now 
bearing  a  capitalization  of  $105,000  per  mile,  but  a  well  known  manipulator — who  made 
restitution  of  millions  to  the  Erie— supervised  its  reorganization,  which  may  account  for 
the  generous  volume  of  water  incorporated  in  its  securities. 

The  Missouri  Pacific  line  form  El  Dorado  to  McPherson,  Kansas,  a  comparatively 
expensive  prairie  road,  being  located  across  the  line  of  drainage,  cost  much  less  thaa 
$10,000  per  mile,  as  have  thousands  of  miles  of  other  prairie  lines. 

•See  Poor's  Manual  for  1881  and  18SS. 


THE   FAKMER,   THE   INVESTOR   AND  THE   RAILWAY.    43 

Possibly  $30,000  per  mile  is  less  than  it  would  cost  to  duplicate  the  railways  east  of 
the  Ohio,  but  the  most  of  the  mileage  being  west  of  that  region,  where  the  cost,  outside 
of  H  few  mountain  roads,  is  at  :i  minimum,  the  estimate,  if  erroneous,  certainly  errs  in 
pUu'ing  the  cost  too  high.  Moreover,  we  have  a  factor  of  safety  in  the  fact  that  the  n.Tlion, 
to  aiil  in  building  railways,  has  granted  197,000,000  acres  of  land,  a  large  part  of  wh.ch 
Las  passed  into  the  possession  of  the  railway  companies,  and  from  which  they  have 
realized  vast  sums,  probably  more  than  5^."00.000.000,  to  which  should  be  added  Slate  and 
municipal  aid  and  individual  donations  to  the  amount  of  $1.50,000,000  to  $2)0,000,000. 

Taking  no  account  of  the  sums  loaned  the  Pacific  railways,  the  people  have  con- 
tributed at  least  $2,000  per  mile  towards  the  cost  of  existing  railways,  hence  we  are  war- 
ranted in  assuming  that  $.'>0,000  per  mile  is  I  lie  maximum  sum  on  which  the  user  should 
furnish  revenue,  less  such  revenue  as  the  corporations  derive  from  rents,  interests  and 
dividends,  from  lands,  buildings,  railways,  slocks  or  bonds  bought  or  brought  into  ex- 
istence by  ati  expenditure  of  any  part  of  such  630,000  per  mile  or  the  earnings  therefrom, 
such  revenue,  aside  fnim  traffic  earnings,  being  now  about  .f90,000,000  per  annum. 

It  is  claimed  that  in  determining  the  amount  of  capital  on  which  the  rates  of  toll 
shall  be  based,  the  people  are  en  til  led  to  no  voice,  but  as  the  compensation  is  to  be  reason- 
able and  the  measure  of  such  compensation  being  the  cost  of  maintaining  and  operating 
the  railway  plus  a  fair  return  for  the  ciipital  actually  employed,  the  people  are  unques- 
tionably entitled  to  a  voice  in  determining  what  such  compensation  shall  be  and  how  it 
shall  be  arrived  at.  and  their  representatives  will  find  the  railways  havecost  nottoexceed 
an  average  of  $30,000  per  mile,  and  could  be  duplicated  forenough  less  to  more  than  ofl'set 
the  enhancement  in  the  value  of  right  of  way,  depot  grounds  and  terminals. 

Railways  well  located  and  mortgaged  for  80  per  cent,  or  less  of  actual  cost  can  dis- 
pose of  three  and  one-half  to  four  and  one-half  per  cent,  bonds  at  par,  but  badly  located 
or  poorly  managed  roads  often  failing  to  pay  interest,  we  may  call  live  per  cent,  a  fair 
rate,  and  on  this  basis  the  annual  net  revenue  of  roads  existing  at  the  close  of  1888,  from 
traffic,  rents,  interest,  dividends  and  all  other  sources,  should  not  exceed  $234,123,000, 
being  $67,408,000  less  than  the  net  traffic  earnings  reported  by  Poor,  and  taking  the  net 
■earnings  ($405,220,000)  as  shown  by  the  Inter-State  Commission,  the  excess  is  $171,097,000 
wrongfully  extorted  from  the  agricultural  and  other  industries  in  one  year. 

This  difference  in  the  amount  of  net  earnings  arises  from  the  fact  that,  in  Poor's 
Manual,  only  traffic  earnings  are  tabulated,*  no  account  being  taken  of  the  immense 
sums  railway  companies  derive  from  rents  of  lands,  buildings,  track  and  terminals,  as 
well  as  in  the  form  of  dividends  on  stocks  and  bonds  owned,  and  the  profits  from  the 
sale  of  such  securities,  all  amounting  to  vast  sums  and  yearly  increasing  as  the  railways 
become  consolidated  and  absorb  more  and  more  of  existing  property;  hence  Mr.  Poor's 
figures  are  incomplete  and  misleading,  inasmuch  as  they  fail  to  convey  a  correct  idea  of 
the  total  of  railway  earnings  or  the  amount  annually  extorted  from  the  user. 

Of  the  $234,123,000  resulting  from  a  five  per  cent,  revenue  on  $30, 000 per  mile,  a  very 
l;irge  part,  as  will  hereafter  be  shown,  belongs  to  the  user  rather  than  the  investor,  while 
many  parallel  roads,  built  for  construction  profits,  are  needless,  and  others  so  badly 
located  that  the  traffic  will  be  wholly  insufficient  to  provide  revenue,  and  the  owners 
must,  like  the  owners  of  badly  located  buildings,  sutler  the  loss  entailed  by  lack  of  busi- 
ness sagacity.  Favorably  located  roads  can  collect  more  than  five  percent.;  should  they 
be  permitted  to  do  so?  Each  railway  company  is  a  distinct  organization,  each  road  a 
separate  instrument  and  specially  conditioned,  and  it  is  questionable  if  the  compensation 
for  the  capital  employed  should,  in  any  case,  be  permitted  to  exceed  the  rates  fixed  upon, 
from  time  lo  time,  us  a  just  return.  As  interest  rates  fall,  so  should  returns  from  railway 
investments. 

Justice  and  reason  appear  to  have  little  part  in  determining  railway  rates,  the  en- 
vironments being  all  potent,  as  in  the  States  where  efficient  granger  lawsf  have  been  re" 
inforced  by  a  strong  and  active  commission  rates  are  much  the  lowest,  and  highest  where 

•Pase  4  of  the  l,nti-oduction  of  Manual  for  IS8'J. 

fGranger  laws"  are  the  laws  enacted  in  the  agricultural  .States  of  the  Mississippi  Valley  for  the 
•r,*>«-oi  of  railway  rates  and  metliods. 


.,) 


44    THE   FARMER,   THE   INVESTOR   AND   THE   RAILWAY. 

either  the  laws  or  the  commission  are  ineffecieut;  yet  enough  has  been  accomplished  to 
show  the  beiieficeut  possibilities  of  governmental  control  in  suppressing  snnie  of  the 
multifarious  evil  practices  of  railway  companies,  and  while  these  practices  continue  they 
are  much  less  common  and  not  so  flagrant  as  in  the  past,  when  the  manager  of  an  Inter. 
State  railway,  in  order  to  destroy  the  value  of  the  property  of  a  coal  company  having  no 
other  outlet  for  its  product,  could,  without  a  minute's  notice,  advance  the  rates  on  coal 
shipped  by  such  company  133  per  cent,  above  the  rates  charged  another  coal  company  in 
which  such  railway  company  and  its  officers  were  stockholders;  nor,  with  the  Inter-State 
law  in  force,  are  railway  ofltieials  likely  to  repeat  the  indiscretion  of  such  manager  in 
writing  the  president  of  a  coal  company  (of  whose  property  he  desired  to  force  a  sale)  the 
subjoined  letter: 

St.  Louis  &  San  Francisco  Railway  Company, 
Office  of  the  Second  Vice-President  and  General,  Manager, 
St.  Louis,  Mo.,  February  9th,  1882. 
President  PUtaburg  Conl  Company,  Pittsburg,  Kansas: 

Dear  Sir — I  will  pass  through  Pittsburg  about  12  o'clock  on  Monday  next,  and 
would  be  glud  to  have  you  join  me  at  Pittsburg,  and  go  to  Qirard,  and  back  to  Pittsburg. 

If  we  can  buy  your  coal  at  a  low  price,  I  think  we  can  possibly  make  a  deal  on  that 
basis. 

As  long  as  you  continue  shipping  coal,  it  has  a  demoralizing  effect  on  the  trade, 
and  renders  the  coal  business  unprofitable,  to  a  certain  extent,  to  the  "Rogers  Coal 
Company,"  Respectfully,  C.  W.  Rogers, 

Second  Vice-Pres't  and  Oen'l  Manager. 

Discriminations  and  other  fraudulent  practices,  whereby  the  few  are  enriched  at 
the  expense  of  the  public,  doubtless  continue,  and  will  until  railway  managers  thus  be- 
traying their  trusts  are  sent  to  keep  company  with  the  men  who  plundered  the  Ocean  ^ 
Fidelity  and  Sixth  Avenue  banks;  but  there  is,  as  compared  with  the  time  preceding  the 
enactment  of  Inter-State  and  State  laws,  but  little  of  the  work  of  discrimination  in  pro. 
gress;  and  great  as  is  this  evil,  it  is  trivial  as  compared  with  those  growing  out  of  a 
capitalization  excessive  by  more  than  one-half,  and  which  is  the  warrant  for  annually 
levying  an  immense  sum  in  unjust  tolls,  by  which  producer  and  consumer  are  alike  de- 
spoiled of  a  large  part  of  their  earnings. 

If  the  courts  are  right  in  holding  that  the  carrier  is  entitled  to  but  a  reasonalile 
compensation,  and  that  the  reasonableness  of  the  charge  rests  upon  the  cost  of  mainten- 
ance, operation  and  the  amount  actually  Invested  in  the  plant,  then  the  exaction  of 
existing  rates  of  toll  is  wholly  indefensible.  Asa  bar  to  the  rendering  of  Justice  to  the 
user,  the  plea  is  made  that  should  rates  be  reduced  to  what  would  afltbrd  but  a  fair  return 
for  the  actual  cost  of  the  plant,  it  would  work  great  hardships  to  the  present  holders  of 
railway  securities,  who  are  assumed  to  have  bought  them  in  good  faith,  and  many  of 
whom  are  widows,  orphans,  trustees  and  institutions  In  which  the  poor  have  deposited 
their  scanty  savings.  Has  this  plea  against  justice  any  basis  except  one  of  sentiment? 
If  sentiment  and  a  charitable  regard  for  the  poor  and  helpless  shall  govern,  are  there  not 
twelve  times  as  many  widows  orphans  and  poor  among  the  60,000,000  of  railway  users? 

From  the  fact  that  there  are  10,000  holders  of  New  "Vork  Central  stock,  Mr.  Poor 
estimates  that  there  are  1,000,000  investors  in  railway  securities,  who,  with  their  depend- 
ents, constitute  a  body  of  5,000,000,  and  it  is  proposed  that  rather  than  this  one-thirteenth 
shall  surrender,  once  for  all,  so  much  of  their  power  to  tax  others  as  is  the  direct  product 
of  fr.aud,  they  shall  continue  such  unjust  taxation. 

This  is  not  simply  a  proposition  that  one-thirteenth  of  the  population  shall  unjustly 
tax  all  others  this  year,  next  year,  or  even  the  third  or  fourth  .year,  but  that  such  burden, 
yearly  increasing  by  the  addition  of  more  water,  shall  becarried  by  the  twelve-thirteenths 
to  their  graves;  that  when  death  relieves  them,  their  children  and  children's  children  for 
countless  generations,  shall  each  in  its  turn  take  up  the  grievous  burden  and  carry  it 
until  they  also  drop  into  the  grave,  and  so  long  as  these  railways  exist,  this  one-thirteenth 
shall  possess  the  power  to  thus  levy  an  iniquitous  impcst  upon  the  entire  industry  of  the 
country'.     Could  anything  be  more  unjust? 

Shall  lid, 000, 000  people  and  their  descendants  sutler  a  great  aii<i  growing  wrong 
rather  than  that  5,000,000  shall  surrender  a  power  to  wliich  they  have  no  right? 


THE   FARMER,  THE  INA'^ESTOR  AND   THE  RAILWAY.    45 

The  railway  is  public  rather  thsm  private  property,  and  while  the  stockholder  is 
entitled  to  the  usufruct  and  its  limited  control,  yet  such  corilrol  is  a  trust  for  a  specific 
purpose,  such  purpose  beinj^  the  service  of  the  ])ublic,  for  which  the  compensation  shall 
be  just  and  reasoiiiible,  but  the  law  never  contemplated  that  one  jMirty  in  interest  sliould 
alone  be  in  ])(jssession  of  the  kuowledf,'c  necessary  to  a  determination  of  the  amount  of 
capital  eiiiiiloyeil  and  the  reasunableiies^s  of  the  charges  made,  and  so  long  as  such  knowl- 
ed.i,'e  is  withheld  shareholders  must  expect  discontent  on  tlie  part  of  the  public  and  eflTorts 
to  secure  such  control  as  will  ensure  justice;  and  it  is  this  discontent  which  has  been  one 
of  the  most  potent  factors  in  bringing  into  existence  the  "Farmers' Alliance"  and  kin- 
dred organizations,  in  which  millions  of  farmers — for  the  first  time  in  history— are  united 
for  a  common  object. 

The  endowment  of  the  railway  company  with  the  exceptional  power  to  enter  upon 
end  take  private  property,  and  the  equally  exceptional  limitation  of  the  stockholders' 
liability  to  the  cost  of  shares  held,  implies  special  duties  and  obligations  to  the  public; 
and  the  i)eople,  whose  lands  have  been  taken,  who  furnish  the  tralTic  and  provide  the 
revenue,  have  a  right  to  a  voice  in  determining  the  justness  of  the  rates  charged. 

Another  plea  is  that  the  cost  of  transportation  is  less  in  the  United  States  than 
elsewhere,  hence  there  can  be  no  cause  of  complaint.  If  rates  are  higher  in  Republican 
France  or  Imperial  Germany,  where  railways  exist,  primarily,  for  military  purposes,  it 
Is  neither  our  dut.v  to  emulate  them  in  such  matters  nor  to  copy  their  costly  modes  of 
railway  administration;  j-et  we  may  well  profit  by  their  example  iu  providing  for  strin- 
gent control  of  railways  and  the  rates  for  carriage. 

The  farmer,  understanding  that  rates  are  unjust  by  reason  of  an  enormous  fictitious 
capitalization,  and  that  such  rates  reduce  the  value  of  his  land  and  its  products,  appeals 
to  legislation  for  relief,  which  States  have  sought  to  furnish  by  laws  regulating  rates  and 
methods  of  administration,  which  are  denounced  as  acts  of  robbery  by  the  men  who  have 
perpetrated  the  frauds  of  which  such  laws  are  the  resultant. 

The  men  loudest  in  denunciation  of  every  attempt  at  control  by  law  are  those  most 
active  in  tlie  manufacture  of  securities,  in  operating  the  construction  company,  in  paying 
unearned  dividends,  in  selling  or  capitalizing  cheap  lines  al  many  times  their  cost- 
These  are  the  special  champions  of  the  widow,  the  orphan  and  the  savings  bank,  whom 
they  have  despoiled  by  the  most  unblushing  frauds.  These  are  the  innocent,  chivalrous 
men,  high  in  the  esteem  of  the  street  and  the  exchange,  who  wish  the  way  left  open  for 
more  niokelplating,  more  Wabashing,  more  Credit  Mobiliers  and  more  stock  and  bond 
watering. 

There  is  abundant  evidence  that  where  the  iaws  have  been  such  as  to  secure  the 
jjreatest  control— Illinois  and  Iowa— well  located  and  judieiouslv  managed  railways  are 
exceedingly  prosperous.  Many  great  lines  derive  the  major  part  of  their  traffic  from  the 
granger  States,  yet  the  laws,  which  railway  managers  and  investors  denounce  as  acts  of 
confiscation,  have  not  prevented  the  pa.ynient  of  good  dividends.  Mr.  Poor  shows  that) 
for  twenty-five  years,  the  Chicago  &  Alton  dividends  have  averaged  8.7  per  cent.;  that 
the  Chicago,  Burlington  <fe  Quiucy  has  paid  regular  cash  dividends  ranging  from  8  to  10 
per  cent,  per  annum,  and  stock  dividends  aggregating  $6,701,990.  The  Chicago,  Rock 
Island  &  Pacific  has  done  about  as  well  in  the  way  of  dividends,  although  its  trafflc  has 
been  so  largely  drawn  from  Illinois  and  Iowa.  Until  certain  bond  and  stock  operationsi 
the  Chicago,  Milwaukee  &  St.  Paul  paid  7  per  cent,  dividends,  and  the  Chicago  &  North- 
western has  swelled  its  capital  account  by  the  payment  of  stock  dividends,  while  paying 
regular  cash  dividends  of  6  to  8  per  cent.,  and  the  Illinois  Central  has,  for  twenty-sis 
years,  paid  dividends  ranging  from  4  to  10  percent.  peraunum,andaggregating  $56,989,847. 

Notwithstanding  these  laws  and  that  nearly  or  quite  all  these  roads  carry  an  undue 
aoaount  of  water,  that  crops  have  failed,  and  panics  have  prostrated  the  industries  of  the 
country,  they  have  prospered,  new  lines  been  added  from  the  tolls  collected  on  the  old, 
the  investor  received  ample  returns,  and  some  of  the  managers  enabled,  by  some  occult 
process,  to  amass  enormous  fortunes,  all  going  to  show  that  the  granger  laws  have  not 
been  oppressive,  and  that  when  railways  fail  to  make  fair  returns  it  is  due  to  faulty  lociv- 


46     THE   FARMER,    THE   INVESTOR  AND   THE   RAILWAY. 


^ 

s 


of  rail- 
built    in 
y'r  from 
of  flctit's 
tal   and 

tolls  on 
ge   built 
receding 

from  ex- 
•c  tolls. 

locoooco— ''-'C<irf05Tt<i^a:i--rcno 

CI 

CDOt^-^OiO^DCOuni-iOOiC^-^ 

c  ec  G<^^^^  <xi  C'4^^  oo  t-i  '^,c^^'^,<^^,c^. 

Miles 

■way 

each 

tolls 

cap  i 

from 

milea 

in     p 

years 

cessi\ 

COCOCOCCCC^iCiOCDCDCDCOt^OOr^ 

X 

si3=-?£ 

asOOOCD^-iCOOOCOCCCSOsCOi:^ 

ciOJcooix.c^cocD-^r-rai'X'trrxci 

^  ES.'-csS 

OOCJl-CDiO'-'CCl-^OCDLOOQC'^tO 

-r/' 

ass^»: 

t^OSQOCCTtH-«TC-10  1^CTJcriQOC'l(MO 

c^- 

L0C0"^00C0t0l0'-it-*OO'M»0C0O 

c„a'ao= 

05-0  COCOOUt>COOI--(Ml^ClCO'^CO 

''-! 

Tot'l  ear 
flctilion 
and  fro 
furnishe 
■way    us 
road   bu 
from. 

^o;Gcr-oot-t-iO'**'Oi^(M  o-^  i- 

05C505050C<luOt^crOOOC:iM'^'r^ 

€^ 

cf 

1Si2 

CC  ^1  O  a:  lO  ^  O  -^  I-  -J^  '-'  -^  CI  CD 

CD 

o  "^  :;^  o 

CI  ^t  O  CC  LO  X  —  !•-  — ■  O  lO  lO  -*  i-O 

£  3  ^-z 

■q'  -r*  :0  05  CO  O  C-l  (M  t--  O  CO  CC  O'  I- 

o|c" 

CO-MCOClt-t^WGOar-ODI^OC'C^-^ 

CO 

1^ 

Bj-fi   OW 

Of-CCCDC^CDC-lOOiCDCCl'-Cl^ 

--^ 

t^  CD  01  C'  lO  ^  CD  »0  O  «  ^  t^  00  — 

^  CI  CO  <*  :d  I'  CO  O  O  —  CO  ic  O 

>— > 

c-fe    :i 

■    ■ 

lis?! 

^ 

^> 

'"^t 

CJt^CCO^-OCl'^'COOOSOOlC'^O 

r^ 

c<j  CD  a;  CO  1:-  ^  lo  »o  :o  c-i  00  ^  o  rr  t-- 

GO  CO  C-1  05  lO  t--  t^  to  1^  05  CD  1--  C;  -^  t^ 

uo 

^»> 

l-^lOCD-^-^CC-fCOCOOlt^OCOCOlC 

•^ 

Ss 

iOCDOir^'^i-'COcoi^ot--r^OcD"i 

S,-2 

Oi^^OCOCKMl^COC^OCOCiOli-H 

«— 1 

i-Hi-HMLOb-ClCOCCOSOiTfOiMCOCO 

OiaSGCI^t-ODCiOSOSOCOOOOOOOaO 

f— t 

1^- 

r"5   Cd 
W   0-S 

^ 

«> 

C  ROM 


ioa 


o  g  8  ^-.2 


OHoaS  J3  o  o  a 


3   '  <u  o 


•^  >  ^  a  o 
<^  fi  >  o  u 


III 


CD  be 

;5.2 


N 


V 


6:::s 


t^i-^t--iO'— lCDa5lCcoo•^^-c^coo 

C^CICOCDt^^*—  I^COl^CO'-tClO-T- 
COlOCli-H.-HCOlO'^COCOi— «'-hC1«— (O 


OicC'CiCi'^'^'—iocDiocoi— cii— i-r 

O  »0  Oi  Tj*  O  CI  O  lO  O  3D  CO  ■:©  r--  lO  CI 
rt^'M'7-Jf— lO-l'^iO'^COC^'— -O-HC-lO 


CO  -fOCDCOCDC^iO-— <IOC^OI>-I0i-0 
1:^CS^';DCDi— lOCDCO'—'CiOi'^CO"^ 

(MCD'— 'Tt^oio-^csi— ■^oscocoeoic 


t^COOOt^CD— <C^C<JI>C1C^[--t^'-i 

lOi— 'lOOiOt-OO-^OCOCOC^CDCD 

CDiOCDt^iOOf-^OOCDCCiO'-''^'^ 
COOOCOOb*"^'— 'COI-'iO^-  XO"«t"l"^ 

i--  LO  ^  CO  CO  I---  T—  :rj  CO  CD  ^_— ;  "^."^  O 

cfci  cf  cfcic^fcowc^'cicf  cNci  cicT 

I  »» 


QOOOC-lh-r-CSlCt^CD'CCD— ''^05'— t 
»OC01005CD03iOGOO:GCOJCO!:D'— «lO 

c:-*t-^:Di-i::2L':ii^cDCi'rtia:io_'-HO_ 

0"CD  cTcfTiO  ■^f~'cD'"cD"l^'"-^*'cO  CO  Oi  1— « 
t^OiOt-C-TflOO— <CDCD050COCO 
IC  lO  *^  o:  lO  IC  ^^^^  fO  CO  O^'^  CD_  C5_t^ 
05  iO"cD"o''t^"cD  io"ci  O  CO  CrfOi  O  "^  r- ( 
COO0COl^CO»— 'lOt-CCCiCDCDOCOO 
^^^r-Hi-HCMCJClClC^CJC^COCOCO 


C-'lCDiOCDi— it^CD*TCOOCOCOOCDl~» 

cc'^'oo  cToTi-^  CO  o"^cf^  ^1-^00  o 

iCcOiOCOiOiOtOCOCOCDCDCDCDUOCD 


C005C0tMO0iCDf-i^HTt*C<IOl000l^ 
t^  lO  O  1— «  CD  O  -^  I--  I--  •—  l-  CJ  00  CI  C^i 
C'lt^iO'— lOSOt— C;05TP'XC0r-<OC0 


Tt<iccDt-cooiO'-'cacorj<iocot^co 

t^h»l"-I-^t^t-CCCOQO00QCCO00COQO 
COOOGOGOQOOOCCOOCOCOCOOOCOOOOO 


5  a 

s  ■■= 

2  >< 


a 

■a 
p 

a> 

■u 

a 

c 

^ 

u 

^ 

a 

■d 

o 

-i 

■r< 

Ji 

3 
O4 


.a 


THE   FARMER,  THE   INVESTOR   AND   THE   RAILWAY.     47 


a 
o 


to 


a 


<  Z 


o 

IS 

s 
a 


bo 

a 

o 


W  2       -      TJ 
©  O  CJ*a^^ 

t»  aj  ©      £  ■"  "C 

ci  >^©S^2£ 


ceo  XlCMOOt^CO-^iOC^iOWi-H-^co 
—  O  O  CO  05  O  CO_iO  CO  1^  CO  CD  CC  »C  :M 
(M  71  S'f  ^-^r-TcC  ^"-^jTrJ*'  TT  CO  CC'^'iO^'^' 


CO  CO 

lO  CO 

cTco 

t^  CO 
CO  CM 

^'o 

<:o  CD 


(Mr*r-C5iot^:DiocD«-<oc 

iCCSCDt-iOCOOSCOOCOCO'' 

r^c-i  t-^1-^  i^  t^  -^  (M  00  t^  o  ; 

CD  ^  CO  Co' lO'co'c-f  QC  h-'o -^"p. 

•rr*-^'rt<c;c:.-Hc^Oicoioc;i: 
"  o-f  co'  oT-m'  o"  cd'  o  ^  »o  cT  -^  c 

CDTf*iCCi  TCCOCC-rfi-Hi— i-^^c 


1^ 


o  o  S 


o     o 

lags 

M  o  ©  a. 


i^Ui  o 


V  © 
CM  • 

-Sua 
U5  o  p. 


~3 


§22- 

Sc-o 


cocoon 

lO  00  U? 
05  TP  t^ 

ococf 

1^  O  'C 

lO  »o  -* 


l^  t"  OS  lO  t*  CD 

05  CD  C5  iC  00  Oi 
O  rH  C5  to  !>•  CD 

:d"  lo"-^  t^  cd"  co' 

I^  t^  rff  iC  O  f-" 
O  »0  lO  iC  "^  CO 

5"  O  l>"  yj^  lO" G-l"  o' 
5  W  CO  t-H  lO  l^  CO 


iC  CD  1— (  -^ 

CO  c:  CO  CO 

0-1^^  05  to 

:d  CD  o  O 
CO  O  tJ*  ^ 

CO  od'o  o" 

05  CD  CO  O 

MG^cq  CO 


■-■  iO 

r-l  O 

cz:  CO 

coo 
COCO 


oooooooocoooooo 
goooooooooooooo 

•^00  CC  -^i  "^^CM  ^^O  fM  O  iri  r>J  CD  C-4  CO 

r-Tcq^co'Lo"-- '--"^'"oo''^crcoeo  crTi^crr 

■CO  I^  O  ^O  CO  '^  CO  CC  .-"  CD  C-I  rr  O  LO  C I 
C5_(M  00'— <0i"^»0«— (CDiOiOCOfHt-oo 

■<;t^  Iff"  ^crt^Tj-"-^'";c'"(~'^(j.f05''(^crr-y^ 

(N  d  C-l  Cq  (M  G^  (M  CO  "^  lO  iC  lO  O  CD  I- 


oooo  o 
CZS  o  o  o  o 
o  o_o  o^o 

o^o'cTcTo" 

CD  CO  i-H  CS  05 
T-i  CO  --^  lO  r-l 

co"t^o 'O'OI 

t~  CO  GO  CO  CO 
o  OOO  --I 


oooooooo 
oooooooo 
o  c:;  o_o  o  o  o  o 

'o"o  cTo'-o  o'o  o'c 

CN  CO  O  I--  LO  1-1  G^  ■"«  : 
o_o  ^^O^*-^  ^  t-  CO  c 
-jTcd"  cTco*"  :o  C^'io" --"'"': 
t^  t--  o  cj:  n  rf  i.o  o  - 

O  O  C'l  "fT  Lt  VO  CD  CD 
1  Ofofof  gI  C-f  CM*crol 


o  o 


CC  CO 

of  cm' 


cocot^coco'^i-HOC5ict---ft— Tfn 

l^-CSCOiOI^COOCOi— "OCO'M'MiOt-» 
C^  UO  CO  X  O  i-^CM  CD  rH  CM  t^  »0  !>.  W  Ut! 

a^c^'ci  r^'^oToTio'c-i"'^  -^x^co'co'cd' 
ococccoi-cDcoi-cooocoooooc:© 


COCSCOG^IOOSCD^^-J^OlOiOCOr- 
t^  »0  O  — <  CD  O  -*  t^  I-  ^  I'  01  CO  CN  CO 

(MI-lO'—  CSO'-'OO'^OCO'-'OCO 


•*iC-X>h-a0CiO'-"MCCf».0iXl^Q0 
I-*  1-  I'-  1^  1-  t-  X  CO  00  GO  CO  CO  OO  Xi  CO 

COCOCO'CO-OOOCOCOX-COCOCOaOGOCO 


48     THE   FARMER,   THE   INVESTOR    AND   THE   RAILWAY. 

tion,  unreasonable  rate  wars,  speculativeor  ineonipeteutmanagementor  an  extraordinary 
excess  of  water  in  capitalization. 

Possibly  a  flood  of  lijrht  may  be  thrown  on  tbis  subject  by  the  experience  of  th« 
writer  when  general  freight  and  passenger  agent  of  a  new  railway.  Imbued  with  the 
idea  that  the  prosperity  of  the  road  would  be  sub.served  by  encouraging  immigration  and 
fostering  business,  the  writer  formulated  tarifTs  calculated  to  further  such  ends.  Imagine, 
bis  astonishment  when  told  by  the  general  manager  they  would  not  answer,  and  to  be 
informed  that  the  road  was  not  being  built  to  malve  money  out  of  its  operation,  but  out  of 
its  construction,  and  what  was  re(iuired  of  the  traffic  deiiartment  wasthe  greatest  present 
revenue  possible  and  to  make  the  j.assenger  rates  just  low  enough  to  take  the  traffic  from 
'the  stages  and  the  freight  rat*  s  no  lower  than  necessary  to  drive  the  ox  teams  out  of  the 
freight  business. 

The  policy  then  outlined  was  pursued  until  the  railway  passed  through  the  reor- 
jganization  thereby  made  inevitable,  and  this  cheaply-built  prairie  line,  with  free  right  of 
way  and  land  grant  and  subsidy  equal  to  its  entire  cost,  is  now  capitalized  for  .$105,000 
jper  mile. 

On  most  railways  the  b.isic  principle  underlying  tariff  and  schedule  is  "All  the 
traffic  will  bear,"  and  it  is  to  hold  in  check  these  "Chevaliers  of  the  road"  that  granger 
laws  are  formulated. 

It  may  be  safely  assumed  that  J30, 000  per  mile  is  tlie  outside  cusl  of  existing  rail- 
ways, and  the  aggregate,  at  the  close  of  1S88,  on  which  tolls  should  be  based,  was  $4,682,- 
246,000;  but  here  the  question  arises:  How  much  of  this  sum  has  the  railway  builder 
furnished,  and  what  part  has  been  extorted  from  the  railway  user  in  the  form  of  excessive 

tolls? 

Available  data  does  not  admit  of  going  back  of  1874,  when  69,27.3  miles  were  in 
operation,  the  cost  of  which,  at  |30,000  per  mile,  being  credited  to  the  builders;  and 
adopting  the  net  (traffic)  earnings  as  shown  by  Poor  we  find  that,  in  1874,  creditiijg  each 
$30,000  with  its  proportion  of  such  earnings,  pro  rata — and  adopting  the  capitalists' 
theory  that;  the  water  in  the  capital  is  en  titled  to  the  same  revenue  as  the  money  part  thereof 
— the  earnings  of  the  water  in  the  capitalization  of  that  year  amounted  to  $91,9.57,829, 
being  equal  to  the  cost  of  3,065  miles  of  railway.  Continuing  such  computations  for 
fourteen  years  and  crediting  the  railway  users  with  the  income  of  so  much  of  the  railway 
mileage  as  was,  from  year  to  year,  built  from  the  tolls  collected  on  the  capitalization  In 
exce.«s  of  $30,000  per  mile,  it  appears  that  the  users  have,  within  fifteen  years,  been 
mulcted,  in  the  shape  of  tolls  based  wholly  on  water,  in  the  sum  of  *$2,422,.5S8,4>5,  from 
which  those  in  possession  have  constructed  80,7-52  miles  of  new  railway,  leaving  but  2,901 
miles,  costing  !r87,030,000,  to  have  been  built,  in  the  same  period,  from  funds  supplied  by 
those  claiming  to  own  all  the  railways.     For  details  of  these  computations  see  Table  I. 

Should  it  be  claimed  that  instead  of  dividing  the  earnings  joro  rata  between  tl\e 
re.al  and  fictitious  capital,  that  the  real  is  entil  led  to  full  compensation  before  anything  i,e 
assigned  to  the  fictitious,  we  will,  without  admitting  that  the  preceding  computations 
are  not  correctly  based,  proceed  to  first  give  compensation,  at  the  rate  of  six  per  cent,  per 
aimum,  for  all  the  capital  actually  employed  (except  that  furnished  by  the  users  in  the 
form  of  tolls  in  excess  of  such  six  per  cent.),  and  again  assuming  that  the  capital  lobuild 
all  the  roads  existing  in  1874  had  been  furnished  by  the  putative  owners,  and  we  find  the 
results  as  set  forth  in  table  II. 

Table  II  shows  that  from  traffic  earnings  alone  the  holders  of  shares  and  bonds 
have  received  six  per  cent,  per  annum  for  every  dollar  invested  and  have,  within  fifteen 
yi'ars,  been  enabled,  by  the  watery  fiction,  to  extort  from  railway  users  the  enormous  sum 
ol"  $1,592,280,471  (to  which  should  be  added  about  half  as  much  more  from  miscellaneous 
earnings),  with  which  has  been  built  5:5,076  miles  of  railway,  for  the  use  of  which  it  is 
proposed  to  forever  tax  those  who  have  furnished  all  the  money  employed  in  its  con- 
struction. 

Is  it  possible  that  no  remedy  can  be  found  for  such  evils?  In  the  National  Bank 
the  law  has  created  another  form  of  public  trust,  but  one  whose  relations  to  the  people 
•This  Is  from  trafBc  earniugs  alone,  to  wbicli  should  be  added  a  vast  sum  from  mlsoellanoons  sources. 


THE   FARMER,  THE   INVESTOR  AND  THE  RAILWAY.    49 

are  infinitely  less  intimate  and  with  the  services  of  which  the  public  could  dispense 
without  serious  results. 

The  railway  and  the  bank  each  perform  functions  that  the  State  might;  yet  the 
bank  alone  is  held  to  the  most  rigid  discharge  of  its  duties,  a  nia.\imum  fixed  for  its  rates 
of  toll,  the  amount  it  shall  loan  any  one  party,  and  the  kind  of  security  determined  as 
well  as  the  amount  of  its  reserve  fund,  its  books  and  assets  at  all  times  subject  to  inspec- 
tion without  notice,  no  share  issued  until  paid  for  in  full,  the  payment  of  unearned  divi- 
dends made  a  penal  offense  and  breaches  of  trust  punislied  in  an  exemplary  manner. 

Can  there  be  any  sufficient  reason  why  the  railway  corporation,  with  infinitely 
greater  power  and  privileges,  performing  functions  a  thousand  times  more  important,  and 
directly  afltecting  a  hundred  persons  for  one  affected  by  bank  administration,  should  not 
be  subjected  to  control  quite  .is  stringent  and  quite  as  far-reaching? 

Shares  and  bonds  being  the  basis  of  tolls,  sliould  a  railway  company  be  permitted 
to  issue  share  or  bond  until  its  par  value  in  actual  money  has  been  covered  into  the  cor- 
porate treasury? 

Should  the  basis  of  tolls  be  laid  until  it  lias  been  shown  that  a  proposed  line  is  nec- 
essary to  public  convenience  and  will  make  fair  returns  on  its  cost? 

Should  a  railway  companj'  be  permitted  to  collect  tolls  until  it  has  shown  theexact 
cost  of  the  instrument  of  transportation? 

Should  it  not  be  a  penal  offense  for  a  railway  official  to  pay  an  unearned  dividend? 

Should  not  railway  accounts,  stock  and  bond  ledgers  and  assets  be  subjected  to  like 
inspection  as  those  of  national  banks? 

Would  not  rate  wars  cease  were  railways,  once  having  reduced  rates,  debarred  from 
ever  again  advancing  them  without  governmental  permission? 

Should  not  railway  companies  be  taxed  on  their  capitalization  as  shown  in  issues 
of  bonds  and  shares? 

Should  not  railways  be  appraised  at  present  cash  value,  and  earnings  from  all 
sources,  be  limited  to  what  would  afford  a  given  maximum  return  on  such  appraisal? 

Or  should  the  nation  assume  the  ownership  and  operate  the  railways  through  a 
non-partisan  commission,  as  the  Province  of  Victoria,  Australia,  has  shown  to  be  both 
practical  and  economical? 

There  is  no  longer  any  question  as  to  the  power  of  the  nation  to  control  these  great 
arteries  of  trade,  nor  is  there  outside  a  limited  circle,  any  question  as  to  the  necessity  of 
such  control,  and  it  but  remains  for  the  lawgivers  to  formulate  such  statutes  as  will  pro- 
tect user  and  investor,  both  of  whom  are  at  the  mercy  of  a  small  body  of  men  who  can 
and  do  make  andmar  the  fortunesof  individuals,  cities  and  States  withoutlet  or  hindrance 


^SHOULD   THE   NATION   OWN   THE    RAILW.-VY? 

When  the  paper  published  in  the  February  Arena,  entitled  "The  Farmer,  the  In- 
vestor and  the  Railway,"  was  written  the  writer  was  not  ready  to  accept  national  owner- 
ship as  a  solution  of  the  railway  problem,  but  the  occurrences  attending  the  flurries  of 
last  Autumn  in  the  money  markets,  when  half  a  dozen  men,  in  order  to  obtain  control  of 
certain  railways,  entered  into  a  conspiracy  that  came  near  wrecking  the  entire  industrial 
and  commercial  interests  of  the  country,  having  shed  a  lurid  light  upon  the  enormous 
and  baleful  power  which  the  corporate  control  of  the  railways  places  in  the  hands  of 
what  Theodore  Roosevelt  aptly  termed  '-the  dangerous  wealthy  classes,"  has  had  the 
effect  of  converting  to  the  advocacy  of  national  ownership,  not  only  the  writer,  but  vast 
numbers  of  conservative  people  of  the  Central,  Western  and  Southern  States,  to  whom 
•First  published  in  the  Arena  July  and  August,  1891. 


50  SHOULD   THE   NATION   OWN   THE    RAILWAYS? 

the  question  now  assumes  this  form:  "Wliich  is  lo  be  prefeired,  a  musier  in  the  shape  of 
a  political  party  that  it  is  possible  to  dislodge  by  the  use  of  the  Ijallot  or  «ue  in  the  shape 
of  ten  or  twenty  Goulds,  Vanderbills,  Huntingtons,  Rockefellers,  Sages,  Dillons  and 
Brices  who  never  die  and  whom  it  will  be  impossible  to  dislodge  by  the  use  of  theballot?" 
The  particular  Gould  or  Vanderbilt  may  die,  as  did  that  Vanderliilt  to  whom  is  aserllied 
the  aphorism  "The  public  be  damned,"  but  the  spirit  aud  power  of  the  Goulds  and  Van- 
ierhilts  never  die. 

OBJECTIONS  TO  NATIONAL  OWNERSHIP. 

The  objections  to  national  ownership  are  many;  that  most  frequently  advancedand 
having  the  most  force  being  the  possibilty  that,  by  reason  of  its  control  of  a  vastly  in- 
creased number  of  civil  servants,  the  party  in  possession  of  the  federal  administration  at 
the  time  such  ownership  was  assumed  would  be  able  to  perpetuate  its  power  indefinitely. 
As  there  are  more  than  700,000  people  employed  by  the  railways  this  objection  would  s-i  em 
to  be  well  taken,  and  it  indicates  serious  and  far-reaching  results,  un/ess  some  way  can  he 
devised  to  neutralize  the  political  power  of  such  a  vast  addition  to  the  oflicial  army. 

In  the  military  service  we  have  a  body  of  men  that  exerts  little  or  no  potitical 
power,  as  the  moment  a  citizen  enters  the  army  he  divests  himself  of  political  functions, 
and  it  is  not  hazardous  to  say  that  700,000  capable  and  efRcient  men  can  lie  found  who.  for 
the  sake  of  employment  to  be  continued  so  long  as  they  are  capable  and  well-behaved,  will 
forego  the  right  to  take  part  in  political  aflEairs.  If  a  suflficient  numlier  of  such  men  can 
be  found  this  objection  would,  by  proper  legislation,  be  divested  of  all  its  force.  At  all 
events,  no  trouble  from  such  a  source  has  been  experienced  since  Australian  railways 
were  placed  under  control  of  non-partisan  commissions,  such  commissions  having  had 
charge  of  the  Victorian  railways  since  February,  1884,  or  a  little  more  than  one  term, 
they  having  been  appointed  for  seven  years,  instead  of  for  life,  as  stated  by  Mr.  W.  M. 
Acworth  in  his  argument  against  government  control  in  the  March  Forum. 

The  second  objection  is  that  there  would  be  a  constant  political  pressure  to  msike 
places  for  the  strikers  of  the  party  in  power,  thus  adding  a  vast  number  of  useless  men  to 
the  force  and  rendering  it  progressively  more  ditBeult  to  effect  a  change  in  the  political 
complexion  of  the  administration. 

That  this  objection  has  much  less  force  than  is  claimed  is  clear  from  the  conduct  of 
the  Postal  Department,  which  is  unquestionably  a  political  adjunct  to  the  administration; 
yet  but  few  useless  men  are  employed,  while  its  conduct  of  the  mail  service  is  a  model  of 
elBciency  after  which  the  corporate  managed  railways  might  well  pattern.  Moreover,  if 
the  railways  are  put  under  non-partisan  control  this  objection  will  lose  nearly  if  not  quite 
all  its  force. 

A  third  objection  is  that  the  service  would  be  less  efficient  and  cost  more  than  with 
continued  corporate  ownership. 

This  appears  to  be  bare  assertion,  as  from  the  very  nature  of  the  case  there  can  be 
no  data  outside  that  furnished  by  the  government-owned  railways  of  British  clo- 
onles,  and  such  data  negatives  these  assertions  and  the  advocates  of  national  ownership 
arejustified  in  asserting  that  such  ownership  would  materially  lessen  the  cost.  Any 
expert  can  readily  point  out  many  ways  in  which  the  enormous  costs  of  corporate  man- 
agement would  be  lessened.  With  those  familiar  with  presentmethods  andnotinterested 
in  their  perpetuation,  this  objection  has  no  force  whatever. 

The  fourth  objection  is  that  with  constant  political  pressure  unnecessary  linos 
would  be  built  for  political  ends. 

This  is  al.so  bare  assertion,  although  it  is  not  impossible  that  such  results  would  fol- 
low; yet  such  has  not  been  the  case  in  the  British  colonies,  where  the  governments  have 
had  control  of  construction.  On  the  other  hand,  it  is  notorious  that  under  corporat" 
ownership,  aud  solely  to  reap  the  profits  to  be  made  out  of  construction,  the  L'uiled  Sl:;l(  > 
have  been  burthened  with  u.seless  parallel  roads  and  such  corporations  as  tlie  Santa  F. 
have  paralled  their  own  lines  for  such  profits.  It  is  quite  safe  to  say  th:it  when  the  nati<  n 
owns  the  railways  there  will  be  no  uickelplating,  nor  will  such  an  uniuHcssary  exiieni'ii" 
ture  be  made  as  was  involved  in  the  construction  of  the  West  Shore;  nor  will  the  fiat  o( 


SHOULD   THE  NATION  OWN  THE  RAILWAYS?  51 

GmiUl  niul  the  S;inta  Fe  be  repeated  of  building  240  miles  side  by  side  for  construction 
profits,  uiucli  of  which  is  located  in  the  arid  portion  of  Kansas,  where  there  is  never 
likely  to  ho  traflic  for  even  one  railway.  Mucli  of  the  Republic  is  covered  with  closely 
parallel  lines  which  would  never  have  been  built  under  national  ownership,  and  this  pro- 
cess will  (!ontinue  as  long  as  the  manipulators  can  make  vast  sums  out  of  construction. 

A  nrth  olijeetion  is  that  with  the  amount  of  red-tape  that  will  be  in  use  it  will  pe 
impossible  to  secure  the  building  of  needed  lines. 

While  such  objection  is  inconsistent  with  the  fourth,  it  may  have  some  force  but  as 
the  greater  part  of  the  country  is  already  provided  with  all  the  railways  that  will  be 
needed  for  a  generation  it  is  not  a  very  serious  objection,  even  if  it  is  as  difficult  as  asserted 
to  procure  the  building  of  new  lines.  Il  is  not  probable,  however,  that  the  government; 
Would  refuse  to  build  any  line  that  would  clearly  subserve  public  convenience  ;  the  con- 
duct of  the  postal  service  negativing  such  a  supposition,  and  for  party  purposes  the  ad- 
ministration would  certainly  favor  the  construction  of  such  lines  as  were  clearly  needed 
anil  it  is  high  time  that  only  such  should  be  built,  and  what  instrumentality  so  fit  to  de- 
termine this  as  a  non-partisan  commission  acting  as  the  agent  of  the  whole  people?  The 
sixth  objection  is  that  lines  built  by  the  government  would  cost  much  more  than  if  built 
by  corporations. 

Possibly  this  would  be  true,  but  they  would  be  much  better  built  and  cost  far  less 
for  maintenance  and  "betterments"  and  would  represent  no  more  than  actual  cost,  and 
such  lines  as  the  Kansas  Midland,  costing  but  $10,200  per  mile,  would  not,  as  now,  be  cap- 
italized at  153,024  per  mile,  nor  would  the  president  of  the  Union  Pacifie  (as  does  Sidney 
Dillon  in  the  North  American  Review  for  April)  say  that  "A  citizen,  simply  as  a  citizeni 
commits  an  impertinence  when  he  questions  the  right  of  a  corporation  to  capitalize  its 
properties  at  any  sum  whatever,"  as  then  there  would  be  no  Sidney  Dillons  who  would 
be  presidents  of  corporations  pretending  to  own  railways  built  wholly  from  government 
moneys  and  lauds,  and  who  have  never  invested  a  dollar  in  the  construction  of  a  property 
which  they  have  now  capitalized  at  the  modest  sum  of  |106,000  per  mile.  After  such  an 
achievement  iu  making  much  out  of  nothing,  it  is  no  wonder  that  Mr.  Dillon  is  a  multi- 
millionaire and  thinks  it  an  impertinence  when  a  citizeu  asks  how  he  has  discharged  his 
trust  iu  relation  to  a  railway  built  wholly  with  public  funds,  no  part  of  which  Mr.  Dillon 
and  his  as.sociates  seem  in  haste  to  pay  back  ;  their  indebtedness  to  ibe  government,  with 
many  years  of  unpaid  interest,  amounting  to  more  than  $50,000,000,  which  is  morp  than 
the  ca.sh  cost  Of  the  railway  upon  which  these  men  have  been  so  sharp  as  to  induce  the 
government,  after  furuishiug  all  the  money  expended  in  its  construction,  to  accept  a 
second  mortgage,  and  now  asks  the  same  accommodating  government  to  reduce  the  rate 
of  interest— which  they  make  no  pretense  of  paying — to  a  nominal  figure,  and  to  wait 
another  hundred  years  for  both  principal  and  interest.  To  make  sure  that  the  govern- 
ment's second  mortgage  shall  be  no  more  valuable  than  second  mortgages  usually  are, 
and  to  make  it  more  comfortable  for  the  manipulators,  Messrs.  Gould  and  Dillon  now 
propose  to  put  a  blanket  first  mortgage  of  .$250,000,000  on  this  property  built  wholly  from 
funds  derived  from  the  sale  of  goverumeut  lands  and  hoods,  and  to  pay  the  interest  on 
which  bonds  the  people  are  yearly  taxed,  although  Mr.  Dillon  and  his  associates  con- 
tracted to  pay  such  interest.  In  his  conception  of  the  relations  of  the  railway  corpora" 
tiiius  to  the  public  Mr.  Dillon  is  clearly  not  in  accord  with  the  higher  tribunals  which 
hold,  iu  substance,  that  railways  are  public  rather  than  private  property  and  that  the 
share-holders  are  entitled  to  but  a  reasonable  compensation  for  the  capital  actually  ex- 
pended in  construction  and  a  limited  control  of  the  property  and  in  this  connection  it 
may  be  well  to  quote  briefly  from  decisions  of  the  United  States  Supreme  Court,  which, 
in  the  case  of  the  Wabash  llailway  vs.  Illinois,  uses  this  lauguage:  "The  highways  in 
the  state  are  ihe  highways  of  the  state.  The  highways  are  not  of  private  but 
of  public  institution  and  regulation.  In  modern  times,  it  is  true,  government  is 
iu  the  habit,  in  some  countries,  of  letting  out  the  construction  of  important 
highways,  requiring  a  large  expenditure  of  capital,  to  agents  generally  corporate 
bodies    created    for    the    purpose,    and    giving  them    the    right    of  taxing  those    who 


52  SHOULD  THE   NATION  OWN   THE  EAILWAYS  ? 

travel  or  transport  goods  thereon  as  a  means  of  obtaining  compensation  for  their 
outlay;  but  a  superintending  power  over  the  highways  and  the  charges  imposed  upon  the 
public  for  their  use  always  remains  in  the  government."  Again  in  Olcott  vs.  the  Super- 
visors it  is  held  that:  "Whether  the  use  of  a  railway  is  a  public  or  private  one  depends)" 
no  measure  upon  the  question  who  constructed  it  or  who  owns  it.  It  has  never  been  con- 
sidered of  auy  importance  that  the  road  was  built  by  the  agency  of  a  private  corporation. 
No  matter  who  is  the  agent  the  function  performed  is  that  of  the  State." 

Mr.  Justice  Bradley  says:  "When  a  railroad  is  chartered  it  is  for  the  purpose  of 
performing  a  duty  which  belongs  to  the  State  itself.  *  *  *  *  It  is  the  duty 
and  prei'ogative  of  the  State  to  provide  means  of  intercommunication  between  one  part  of 
its  territory  and  another." 

If,  as  appears,  such  is  the  duty  of  the  State  (nation)  why  should  not  the  StateVesume 
the  discharge  of  this  duty  when  the  corporate  agents  to  which  it  has  delegated  it  are 
found  to  be  using  the  delegated  power  for  the  purpose  of  oppressing  and  plundering  a 
public  which  it  is  the  duty  of  the  government  to  protect? 

The  abilities  of  the  man  who  cannot  become  a  multi-millionaire  with  the  free  use, 
for  25  years,  of  $33,000,000  of  government  funds  must  be  of  a  very  low  order  and  it  is  no 
wonder,  that  after  having  for  so  many  years  had  the  use  of  such  a  sum  without  pajTueut 
of  interest  Mr.  Dillon  and  his  associates  are  very  wealthy  and  like  others  who  are  re- 
taining what  does  not  belong  to  them  think  it  an  impertinence  when  the  owner  enquires 
what  use  they  are  making  of  property  to  which  they  have  no  right.  Had  the  nation 
built  the  Union  Pacific  there  would  have  been  no  "Credit-Mobilier"  and  its  unsavory 
scandal  and  it  is  safe  to  say  that  the  road  would  not  now  be  made  to  represent  an  expendi- 
ture of  $106,000  per  mile  and  that  Mr.  Dillon  and  some  others  would  not  have  so  much 
money  as  to  warrant  them  in  putting  on  such  insufferable  airs.  When  it  is  remembered 
what  use  Oaks  Ames  and  the  Union  Pacific  crew  made  of  issues  of  stock  it  is  not  at  all 
surprising  that  the  president  of  the  Union  Pacific  should  think  it  an  impertinence  for  a 
citizen  to  question  the  amount  of  capitalization  or  the  use  to  which  a  part  of  such  issues 
have  been  put  some  of  which  are  within  the  knowledge  of  the  writer  so  far  as  relates  to 
issues  of  that  part  of  the  Union  Pacific  lying  in  Kansas  and  built  by  Samuel  Hallett  who 
told  the  writer  that  he  gave  a  member  of  the  then  federal  cabinet  several  thousand 
shares  of  the  capital  stock  of  the  "Union  Pacific  Railway  Eastern  Division" — now  the 
Kansas  division  of  the  Union  Pacific— to  secure  the  acceptance  of  sections  of  the  road  which 
were  not  built  in  accordance  with  the  requirements  of  the  act  of  Congress  which  provided 
that  a  given  amount  of  government  bonds  per  mile  should  be  delivei'ed  to  the  railway 
company  when  certain  offlcials  should  accept  the  road  and  it  was  a  quarrel  with  the  chief 
engineer  of  the  road  in  relation  to  a  letter  written  by  such  engineer  to  President  Lincoln, 
Informing  him  of  the  defective  construction  of  this  road,  that  caused  Samuel  Hallett  to  be 
shot  down  in  the  streets  of  Wyandotte,  Kansas  by  engineer  Talcott.  It  is  within  the 
the  knowledge  of  the  writer  that  the  member  of  the  cabinet  to  whom  Mr.  Hallett  said  he 
gave  several  thousand  shares  of  stock  held  an  amount  of  Union  Pacific  shares 
years  afterwards  and  that  many  years  after  he  left  the  cabinet  he  continued  to  draw  a 
large  salary  from  the  Union  Piicific  company.  Mr.  Hallett  also  told  the  writer  the  argu- 
ments applied  to  Congressmen  to  induce  them  to  change  the  government  lien  from  a, first  to 
a  second  nioitgag.,'  of  the  Pacific  Railway  lines  aud  what  was  his  contribution  in  dollars 
to  the  fund  used  to  enable  congressmen  to  see  the  force  of  the  arguments  used. 

When  issues  of  railway  shares  are  used  for  corrupt  purposes  it  is  certainly  an  im- 
pertinence for  a  citizen  to  make  enquiries  or  offer  any  remarks  in  relation  thereto. 

The  seventh  objection  to  state  owned  railways  is  that  they  are  incapable  of  progres- 
sive improvement,  as  are  corporate  owned  ones,  and  will  not  keep  pace  with  the  progress 
of  the  nation  in  other  respects,  and  in  his  Forum  article  Mr.  Acworth  lays  great  stress 
upon  this  phase  of  the  question  and  argues  that  as  a  result  the  service  will  be  far  less  sat- 
isfactory  than  now. 

There  may  be  force  in  this  objection,  but  the  evidence  points  to  the  opposite  con- 
clusion. When  the  nation  owns  the  railways  trains  will  run  into  union  depots,  the 
equipment  will  become  uniform  and  of  the  best  character,  and  so  sufficient  that  the  traffic 


SHOULD  THE    NATION  OWN  THE   RAILWAYS?  5H 

of  no  part  of  the  country  would  have  to  wait  while  the  worthless  locomotives  of  some 
bankrupt  corporatiDii  were  liciiii;-  patolied  up,  uor  would  there  be  the  present  difficulties 
in  obtaiiiiiis^  freight  cars,  growing  out  of  the  poverty  of  corporations  which  have  been 
plundered  by  the  manipulators,  nor  would  iniprovciiient  be  hindered  by  the  diverse  ideas 
of  the  managers  of  various  lines  in  relation  to  the  adoption  of  devices  intended  to  render 
life  more  secure,  or  to  add  to  the  public  convenience.  That  such  is  one  of  the  evils  of  cor- 
porate management  is  demonstrated  daily  and  is  shown  by  the  following  from  the  Rail- 
way  JRcvieiv  of  March  7th,  1891 :  "It  is  stal-ed  that  a  bill  will  be  introduced  in  the  Illinois 
legislature,  at  the  suggestion  of  the  railroad  and  warehouse  commissioners,  governing  the 
placing  of  interlocking  plants  at  railway  grade  crossings.  It  sometimes  happens  that  one 
of  the  comi)anies  concerned  is  anxious  to  put  in  such  a  plant  and  the  other  objects.  At 
present  there  is  no  law  to  govern  the  matter  and  the  enterprising  company  is  forced  to 
abide  the  time  of  the  other."  Instead  of  national  ownership  being  a  hindri.nce  to  im- 
provement and  enterprise  the  results  in  Australia  prove  the  contrary,  as  in  Victoria  the 
government  railways  are  already  provided  with  interlocking  plants  at  all  grade  crossings 
and  one  line  does  not  have  to  wait  the  motion  of  another,  but  all  are  governed  by  an  ac. 
tive  and  enlightened  policy  which  adopts  all  beneficial  improvements,  ajipliances  or 
modes  of  administration  that  will  add  either  to  the  public  safety,  comfort  or  convenience. 
It  is  safe  to  say  that  had  the  nation  been  operating  the  railways  there  would  have  been 
no  Fourth  avenue  tunnel  horror  and  C'hauncy  Depew  and  associates  would  not  now  be 
under  indictment,  as  the  government  would  not  have  continued  the  use  of  the  death 
■dealing  stove  on  half  the  railways  in  the  country  in  order  to  save  money  for  the  share- 
holders. 

Existing  evidence  all  negatives  Mr.  Acworth's  postulate  "That  state  railway  sys- 
tems are  incapable  of  vigorous  life." 

An  objection  to  national  ownership  which  the  writer  has  not  seen  advanced  is 
that  states,  counties,  cities,  townships  and  school-districts  would  loose  some  $27,000,000  of 
revenue  derived  from  taxes  upon  railways. 

While  this  would  be  a  serious  loss  to  some  communities  there  would  be  compensat- 
ing advantages  for  the  public  as  the  cost  of  transportation  would  be  lessened  in  like 
measure. 

Many  believe  stringent  laws  enforced  by  commissions  having  judicial  powers  will 
serve  the  desired  end  and  the  writer  was  long  hopeful  of  the  efflcacy  of  regulation  by 
state  and  national  commissions  but  close  observation  of  their  endeavors  and  of  the  con- 
stant efforts — too  often  successful— of  the  corporations  to  place  their  tools  on  such  com- 
missions and  to  evade  all  laws  and  regulations  have  convinced  him  that  such  control  is 
and  must  continue  to  be  inefTective  and  that  the  only  hope  of  just  and  impartial  treat- 
ment for  railway  users  is  to  exercise  the  "right  of  eminent  domain",  condemn  the  rail- 
ways and  pay  their  owners  what  it  would  cost  to  duplicate  them  and  in  this  connection 
it  may  be  well  to  state  what  valuations  some  of  the  corporations  place  upon  their  proper- 
ties. 

Some  years  since  the  "Santa  Fe"  filed  in  the  counties  on  its  line  a  statement  show- 
ing that  at  the  then  price  of  labor  and  materials — rails  were  then  double  the  present  price 
— that  the  road  could  he  duplicated  for  $9,685  per  mile  and  the  materials  being  badly 
worn  the  actual  cash  value  of  the  road  did  not  exceed  $7,725  per  mile. 

In  1885  the  superintendent  of  the  St.  Louis  &  Iron  Mountain  Railway,  before  the 
Arkansas  State  Board  of  Assessors,  swore  that  he  could  duplicate  such  railway  for  $11,000 
per  mile  and  yet  Mr.  Gould  has  managed  to  float  its  securities  notwithstanding  a  capital- 
ization of  Ave  times  that  amount. 

THE   ADVANTAGE  OF  NATIONAL  OWNERSHIP. 

First  would  be  the  stability  and  practical  uniformity  of  rates  now  impossible,  as 
they  are  subject  to  change  byhundreds  of  officials,  and  are  often  made  for  the  purpose  of 
enriching  such  officials.  State  and  federal  laws  have  had  the  eflect  of  nniking  discrimi- 
nations less  public  and  less  numerous,  but  it  is  doulitful  if  they  are  less  eflective  in  en- 


64  SHOULD  THE    NATION   OWN  THE   RAILWAYS? 

riching  officials  and  their  partners  although  it  may  be  necessary  to  be  more  careful  in 
covering  up  tracks.  That  they  are  continued  is  within  the  cognizance  of  every  well  in. 
formed  shipper  and  are  made  clear  by  such  cases  as  that  of  Counselmau  and  Peasley  now 
before  the  United  States  Supreme  Court.  Conselman  and  Peasley — one  a  large  shipper 
and  the  other  a  prominent  railway  official — refused  to  testify  before  a  United  States  grand 
Jury  upon  the  plea  that  to  do  so  might  criminate  themselves;  the  federal  law  making  it  a 
criminal  offense  to  make  or  benertt  by  discriminating  rates.  Oounselman  had  been  given 
rates  on  corn  some  five  cents  less  per  100  pounds  than  others  from  Kansas  and  Nebraska 
points  to  Chicago. 

The  outrageous  character  of  this  discrimination  will  appear  when  we  reflect  that 
five  cents  per  100  pounds  is  an  enormous  profit  on  corn  that  the  grower  has  sold  at  from 
18  to  20  cents  per  100  pounds  and  that  such  a  margin  would  tend  to  drive  every  one  but 
the  railway  officials  and  their  secret  partners  out  of  the  trade,  as  has  practically  been  the 
case  on  many  western  roads.  Doubtless  such  rates  are  sometimes  made  in  order  to  take 
the  commodity  overa certain  line,  and  there  is  no  divide  with  the  officials;  but  the  eflect 
upon  the  com])etitors  of  the  favored  shipper  and  the  public  is  none  the  less  injurious  and 
such  practices  would  not  obtain  under  uatioual  ownership,  when  railway  users  would  be 
treated  with  honesty  and  impartiality  which  the  experience  of  half  a  century  shows  to 
be  impossible  with  corporate  ownership. 

Referring  to  the  rate  question  in  their  last  report  the  Interstate  Commerce  Com- 
mission says:  "If  we  go  no  farther  than  the  railroad  managers  themselves  for  informa- 
tion, we  shall  not  find  that  it  is  claimed  that  railroad  service,  as  a  whole,  is  conducted 
without  unjust  discrimination." 

"  If  rates  are  secretly  out,  or  if  rebates  are  given  to  large  shippers,  the  fact  of  itself 
shows  the  rates  which  are  charged  to  the  general  public  are  unreasonable,  for  they  are 
necessarily  made  higher  than  they  ought  to  be  in  order  to  provide  for  the  cut  or  to  pay 
the  rebate." 

' '  If  the  carrier  habitually  carries  a  great  number  of  people  free,  its  regular  rates  are 
made  the  higher  to  cover  the  cost;  ifheavy  commissions  are  paid  forobtaiuingbusiness,  the 
rates  are  made  the  higher  that  the  net  revenues  may  not  suffer  in  consequenee ;  if  scalpers 
are  directly  or  Indirectly  supported  by  the  railroad  companies,  the  general  public  refunds 
to  the  companies  what  the  support  costs." 

The  commission  quote  a  Chicago  railway  manager  as  saying  :  "  Rates  are  absolutely 
demoralized  and  neither  shippers,  passengers,  railways,  or  the  public  in  general' make  any" 
thing  by  this  state  of  affairs.  Take  passenger  rates  for  instance  ;  they  are  very  low  ;  but 
who  benefits  by  the  reduction?  No  one  but  the  scalpers.  *  *  *  *  In  freight  matters 
the  case  is  just  the  same.  Certain  shippers  are  alloweed  heavy  rebates,  while  others  are 
made  to  pay  full  rates.  *  *  *  *  The  management  is  dishonest  on  all  sides,  and  there 
is  not  a  road  in  the  country  that  can  be  accused  of  living  up  to  the  interstate  law.  Of 
course  when  some  poor  devil  comes  along  and  wants  a  pass  to  save  him  from  starvation 
he  has  several  clauses  of  the  interstate  act  read  to  him;  but  when  a  rich  shipper  wants  a 
pass,  why  he  gets  it  at  once." 

From  years  of  iueflectual  efforts,  on  the  part  of  state  and  national  legislatures  and 
commissions,  to  regulate  the  rate  business  it  would  appear  that  the  onlj'  remedy  is  na- 
tional ownership,  which  would  place  the  rate  making  power  in  one  body,  with  no  induce, 
ment  to  act  otherwise  than  fairly  and  impartially,  and  this  would  simplify  the  whole 
business  and  relegate  an  army  of  traffic  managers,  general  freight  agents,  soliciting 
agents,  brokers,  scalpers,  and  hordes  of  traffic  association  officials  to  more  useful  callings 
while  relieving  the  honest  user  of  the  railway  of  intolerable  burthens. 

Under  corporate  control,  railways  and  their  officials  have  taken  possession  of  the 
majority  of  the  mines  which  furnish  the  fuel  so  necessary  to  domestic  and  industrial  life, 
and  there  are  but  few  coal  fields  where  they  do  not  fix  the  price  at  which  so  essential  an 
article  shall  be  sold,  and  the  whole  nation  is  thus  forced  to  pay  undue  tribute. 

Controlling  rates  and  the  distribution  of  cars,  railway  ofBcials  have  driven  nearly 
all  the  mine  owners  to  the  wall  who  have  not  railways  or  railway  officials  for  partners. 
Per  instance;  in  Eastern  Kansas,  on  the  line  of  the  "St.  Louis  &  San  Francisco  Railway 


SHOULD   THE   NATION  OWN  THE   RAILWAYS?  55 

Company,"  were  two  cnal  companies,  whose  plants  were  of  about  equal  capacity,  and  sev- 
eral individual  sbippers.  The  railway  company  and  its  officials  became  iuteres-ted  in  one 
of  the  coal  companies  and  such  company  was.  by  the  rebate  and  other  processes,  given 
rates  which  averaged  but  forty  per  cent,  of  the  rates  charged  other  shippers  the  result  bo- 
lug  that  all  tilt*  other  shippers  were  driven  out  of  the  business,  a  part  of  them  being  hope- 
lessly ruined  before  giving  up  the  struggle.  In  addition  to  gross  discriminations  in  rates 
this  railway  eompauy  practiced  worse  discriminations  in  the  distribution  of  cars;  for  in- 
stance during  one  period  of  564  days,  as  was  proven  in  court,  they  delivered  to  the  Pitts- 
burg Coal  Compauy  2371  empty  cars  to  be  loaded  with  coal  although  such  company  had 
sale  for  and  a  capacity  to  produce  and  load,  during  the  same  period,  more  than  10,000 
cars.  During  tlie  same  period  the  railway  company  delivered  to  the  'Rogers  Coal  Com- 
pany" in  which  the  railway  company  and  C.  W.  Rogers,  its  vice  president  and  general 
manager,  were  interested,  no  less  than  15,483  coal  cars  while  456  were  delivered  to  indi- 
vidual shippers.  lu  other  words;  the  coal  company  owned,  in  large  part,  by  the  railway 
and  its  otlicials,  was  given  82  per  cent,  of  all  the  facilities  to  get  coal  to  market,  although 
the  other  shippers  had  much  greater  combined  capacity  than  had  the  Rogers  Coal  Com- 
pany. 

During  the  lust  four  months  of  the  period  named,  aud  when  the  Pittsburg  Coal 
Company  had  the  plant,  force  and  capacity  to  load  thirty  cars  per  day,  they  received  an 
average  of  one  and  a  fourth  cars  per  day,  resulting,  as  was  intended,  in  the  utter  ruin  of 
a  prosperous  business  aud  the  involuntary  sale  of  the  property,  while  the  railway  coal 
company,  the  railway  officials,  aud  the  accommodating  friends  who  operated  the  Rogers 
Coal  Compauy  made  vast  sums  of  money,  aud  when  all  other  shippers  had  thus  been 
driven  otf  the  line  the  price  of  coal  was  advanced  to  the  consumer. 

pn  another  railway,  traversing  the  same  coal  field,  the  railway  or  its  officials  be- 
came interested  in  the  Keith  it  Perry  Coal  Compauy— the  largest  coal  company  doing 
business  on  the  line — and  here  the  plan  seems  to  have  been,  in  addition  to  the  mauipula- 
tion  of  rates,  to  starve  other  mine  operators  out,  and  force  them  to  sell  their  coal  to  the 
Keith  &  Perry  compauy,  by  failing  to  furnish  the  needed  cars  to  those  who  did  not  sell 
their  coal  to  the  Keith  &  Perry  company  at  a  very  low  price. 

When  the  Keith  &  Perry  company  had  a  great  demand  for  coal,  such  parties  as  sold 
the  product  of  their  mines  to  that  compauy  were  furnished  with  cars,  but  for  the  other 
operators  cars  were  not  to  be  had,  such  cars  as  were  brought  to  the  field  being  assigned  to 
such  parties  as  were  loading  to  the  Keith  &  Perry  compauy,  the  plea  being  that  such 
compauy  furnished  the  coal  consumed  by  the  locomotives  of  the  railway. 

One  operator,  after  being  for  years  forced  in  this  way  to  sell  his  product  to  the  Keith 
&  Perry  company  or  see  his  several  plants  stand  idle,  has,  iu  recent  months,  been  obliged 
to  build  some  seven  miles  of  railway  in  order  to  reach  four  different  roads  and  thus  have 
a  fighting  chance  for  cars,  although  all  these  railways  are  provided  with  coal  mines 
owued  by  the  corporations  or  their  officials. 

In  Arkansas  Jay  Gould,  or  his  railway  company,  own  coal  mines  and  the  coal  is 
transported  to  the  neighboring  town  at  low  rates  aud  there  is  an  ample  supply  of  cars 
for  such  mines,  but  the  owners  of  an  adjoining  mine  are  forced  to  haul  their  coal,  some 
eighteen  miles,  to  the  same  town  in  wagons,  as  the  rates  charged  them  over  Mr.  Gould's 
railway  are  so  high  as  to  absorb  the  value  of  the  coal  at  destination. 

Not  only  are  individuals  thus  oppressed,  but  for  reasons  which  only  the  iuitiated 
can  fathom  there  are  seemingly  purposeless  discrimination  against  localities,  as  shown  in 
the  following  extract  from  the  Coat  Trade  Journal  of  March  25th,  1891: 

"Capt,  Thomas  H.  Bates,  before  the  railroad  committee  of  the  Colorado  Senate 
Bald:  The  Grand  River  Coal  and  Coke  Company  mine  their  coal  in  Garfield  County, 
about  fifty  miles  west  of  Leadville,  and  all  they  sell  in  Denver,  Colorado  Springs  and 
Pueblo,  has  to  be  hauled  through  Leadville.  At  Leadville  the  individual  consumer  has 
to  pay  seven  dollars  per  ton  for  this  coal  while  in  Denver,  with  an  additional  haul  of 
150  miles,  the  coal  from  the  same  mines  is  delivered  to  the  individual  cousuujer  for 
Jo. 50  per  ton.  The  Colorado  Coal  &  Iron  Company  produce  all  the  anthracite  coal  sold 
iu  Colorado.     It  is  mined  at  Crested   Butte,  which  is  150  miles  nearer  Leadville  than 


50  SHOULD   THE   ?f  ATION   OWN  THE    RAILWAYS? 

Denver  yet  this  coal  is  sold  in  Leadville  for  19.00  to  the  individual  consumer  while  tlie 
same  coal  is  hauled  150  miles  farther  and  sold  to  the  individual  consumer  for  an 
advance  of  25  cents  per  ton  over  the  Leadville  price  and  is  sold  iu  Denver  for  $7.10  per 
ton  in  carload  lots." 

With  the  government  operating  the  railways,  discriminations  would  cease,  as  would 
individual  and  local  oppression;  and  we  may  be  sure  that  an  instant  and  absolute  divorce 
would  be  decreed  between  railways  and  their  officials  on  one  side  and  commercial  enterprises 
of  every  name  and  kind  on  the  other. 

There  are  but  three  countries  of  any  importance  where  the  railways  are  operated  by 
corporations  permitted  to  fix  rates  as  in  all  others  the  government  is  the  ultimate  rate 
making  power:  these  are  Great  Britain,  Canada,  and  tlie  United  States,  and  while  the  Brit- 
ish government  exercises  a  more  eflWctive  control  than  we  do  there  are  many  and  oppres- 
sive discriminations,  and  complaints  loud  and  frequent  and  English  farmers  find  it 
nec(«sary  to  unite  for  the  purpose  of  securing  protection  from  corporate  oppression  as  is 
shown  by  the  following  from  the  Liverpool  Courier  of  January  29th,  1891. 

"LANCASHIRE  FARMERS  AND  RAILWAY  RATES. 

"After  the  counsel  given  them  yesterday  by  Mr.  A.  B.  Forwood  of  Orma- 
kirk,  it  may  be  expected  that  the  Liverpool  District  Farmers'  Club  will  be 
on  the  watch  for  tangible  evidence  of  their  grievances  against  the  railway  com- 
panies. *****  Under  certain  circumstances  competition  operates  to 
the  advantage  of  the  public,  and  rival  carriers  are  constrained  to  convey  goods  from  place 
to  place  at  moderate  charges,  but  where  a  company  is  not  held  in  check  the  tendency  is 
for  rates  to  advance.  In  many  cases,  too,  special  interests  of  the  companies  are  promoted 
at  the  expense  of  localities,  and  even  individuals  are  subjected  to  the  wrong  of  preli  ren- 
tial  charges.  (There are  no  complaints  in  Britain  that  tliese  discriminations  are  praciised 
for  the  purpose  of  enriching  the  officials.)  Hence  the  necessity  for  the  Railway  Commis- 
sion to  regulate  the  magnates  of  the  iron  road,  who,  when  left  without  restraint  pay  little 
regard  to  interests  other  tlian  those  of  their  share-holders." 

Although  Mr.  Acworth  fails  to  mention  this  phase  of  English  railway  administra- 
tion it  would  appear  that  the  evils  of  discrimination  are  common  under  corporate  manage" 
men  tin  Great  Britain  and  thatthey  are  inherent  to  and  inseparable  from  such  management, 
and  that  the  questions  of  rates,  discriminations  and  free  tralticin  fuel  can  be  satisfactorily 
adjusted  only  by  national  ownership  and  if  for  no  other  reasons  such  ownership  is  greatly 
to  be  desired. 

The  failure  to  furnish  equipment  to  do  the  business  of  the  tributary  country 
promptly  is  one  of  the  greater  evils  of  corporate  administration,  enabling  officials  to  prac. 
tice  most  injurious  and  oppressive  forms  of  discrimination  and  is  one  that  neither  federal 
or  state  commission  pays  any  attention  to.  With  national  ownership  a  sufficiency  of 
ears  would  be  provided.  On  many  roads  the  funds  that  should  have  been  devoted  to 
furnishing  the  needed  equipment,  and  which  the  corporations  contracted  to  provide 
when  they  accepted  their  charters,  have  been  divided  as  construction  prolils.  or,  as  in  the 
case  of  the  Santa  Fe,  Union  Pacific  and  many  others,  diverted  to  the  payment  of  un- 
earned dividends  while  the  public  sufTers  from  this  failure  to  comply  with  charter  obli- 
gations; yet,  Mr.  Dillon  informs  us  that  the  citizen  commits  an  impertinence  when  he 
enquires  why  contract  obligations,  which  arc  the  express  consideration  for  the  excep- 
tional powers  granted,  are  not  performed. 

Another  great  advantage  which  would  result  from  national  ownership  would  be 
such  an  adjustment  of  rates  that  traffic  would  take  the  short  route  and  not,  as  under 
corporate  management,  be  sent  around  by  way  of  Robin  Hood's  barn,  when  it  might 
reach  destination  by  a  route  but  two-thirds  as  long,  and  thus  saving  the  unnecessary  tax 
to  which  the  industries  of  the  country  are  subjected.  That  traffic  can  be  sent  by  these 
round-about  routes  at  the  same  or  less  rates  than  is  charged  by  the  shorter  ones  is  prima 
facie  evidence  that  rates  are  too  high.  If  it  costs  a  given  sum  to  transport  a  specifio 
amount  of  merchandise  a  thousand  miles,  it  is  clear  that  it  will  cost  a  greater  sum  to 
transport  it  fifteen  hundred;  and  yet  traffic  is  daily  diverted  from  the  thousand  mile  route 
to  the  fifteen  hundred  one  and  carried  at  the  same  or  lower  rates  than  is  charged  by  the 


SHOULD  THE  NATION   OWN  THE  RAILWAYS?  57 


shorter  line.    It  is  evident  that  if  the  long  route  can  afford  to  do  the  business  for  the  -rates 
charged  that  the  rates  charged  by  the  shorter  are  excessive  in  a  high  degree. 

Under  government  management  traffic  would  take  the  direct  route,  as  mail  matter 
now  doe.s,  and  the  industries  of  the  country  be  relieved  of  the  enormous  tax  imposed  by 
needless  hauls.  Only  those  .somewhat  familiar  with  the  extent  of  the  diversions  from 
direct  routes  can  form  any  conception  of  the  aggregate  saving  that  would  be  effected  by 
such  change  as  would  result  from  national  ownership,  and  which  may  safely  be  estimated 
as  equal  to  2}  per  cent,  of  tlie  entire  cost  of  the  railway  service,  or  $2.5,000,000  per  annum. 

With  the  government  operating  the  railways  there  would  be  a  great  reduction  in 
the  number  of  men  emploj-ed  in  towns  entered  by  more  than  one  line.  For  instance  take 
a  town  where  there  are  three  or  more  railways  and  we  find  three  (or  more)  full  fledged 
staffs,  three  (or  more)  expensive  up-town  freight  and  ticket  ofBees,  three  (or  more)  separ- 
ate sets  of  all  kinds  of  otfleials  and  employes,  and  three  (or  more)  separate  depots  and 
yards  to  be  maintained. 

Under  government  control  these  staffs — except  in  very  large  cities — would  be  re- 
duced to  one,  and  all  trains  would  ruu  into  one  centrally  located  depot;  freight  aud  pas- 
sengers be  transferred  without  present  cost,  annoyance  and  friction,  and  public  conveni- 
ence and  comfort  subserved  and  added  to  in  manner  and  degree  almost  inconceivable. 

Economies  which  would  be  effected  by  such  stafi  reductions  would  more  than  offset 
any  additions  to  the  force  likely  to  be  made  at  the  instance  of  politicians,  thus  eliminat- 
ing that  objection,  and  such  saving  may  be  safely  estimated  at  120,000,000  per  annum. 

With  the  nation  owning  the  railways  the  great  number  of  expensive  attorneys  now 
employed,  with  all  the  attendant  corruption  of  the  fountains  of  Justice,  can  be  dispensed 
with  and  there  will  be  no  corporations  to  take  from  the  bench  the  best  legal  minds  by 
offering  three  or  four  times  the  federal  salary;  nor  will  there  be  occasion  for  a  Justice  of 
the  Supreme  Court  of  Kansas  to  render  a  decision  that  acorporation  chartered  by  Kansas 
for  the  sole  purpose  of  building  a  railway  in  that  State  has  the  right  and  power,  under 
such  charter,  to  guarantee  the  bonds  of  corporations  building  railways  in  Old  or  New 
Mexico,  and  shortly  after  writing  such  decision  be  carted  all  over  the  seaboard  States  in 
one  of  the  luxurious  private  cars  of  such  corporation.  Under  national  ownership  such 
judges  would  pay  their  traveling  expenses  in  the  ordinary  manner  and  not  half  as  many 
judges  would  travel  on  passes.  There  are  many  judges  whose  decisions  any  number  of 
passes  would  not  affect,  but  if  passes  are  not  to  have  any  effect  upon  legislation  and  liti- 
gation why  are  congressmen,  legislators,  judges  and  other  court  officials  singled  out  for 
this  kind  of  martyrdom?  If  the  men  who  attain  these  positions  remained  private  citi- 
zens would  passes  be  thrust  upon  them? 

Although  the  rei)i)rts  of  the  Victorian  Commissioners  show  in  detail  all  the  ex. 
penditures  of  railway  administration,  y  et  not  one  dollar  is  set  down  for  attorneys'  salaries 
or  for  legal  expenses,  and  it  is  presumed  that  the  ordinary  law  officers  of  the  government 
attend  to  the  little  legal  business  arising,  and  yet,  judging  from  reports  made  by  Kansas 
roads,  tlie  expenditures  of  the  corporate  owned  railways  of  the  United  States  for  attorneys 
and  other  legal  expenses  are  at  least  two  per  cent,  of  the  entire  cost  of  operating  the  roads 
and  yearly  aggregate  some  $14,000,000,  all  of  which  is  taken  directly  from  railway  users, 
and  is  a  direct  tax,  which  would  be  saved  under  national  ownership,  as  United  States  dis- 
trict attorneys  could  attend  to  such  legal  business  as  might  arise.  This  expeniture  is 
incurred  in  endless  controversies  between  the  corporations;  in  wrecking  railways;  in 
plundering  the  shareholders;  in  contending  against  state  and  federal  regulations;  in 
manipulating  elections  and  legislation,  aud  in  wearing  out  such  citizens  as  seek  legal  re- 
dress for  some  of  the  manj'  outrageous  acts  of  oppression  practiced  by  the  corporations. 
Once  the  government  was  in  control,  these  lawyers  would  be  relegated  to  some  employ, 
nient  where  they  would  do  less  harm,  even  if  not  engaged  in  a  more  honorable  vocation 
than  that  of  trying  to  defeat  justice  by  the  use  of  such  questionable  means  as  the  control 
of  the  vast  revenues  of  the  corporations  placed  in  their  hands. 

Is  it  possible  that  raihvaj-  companies  can  legitimatelj'  use  anything  like  |14,000.000 
yearly  in  protecting  their  rights  in  the  courts? 

The  Dresident  of  the  Union  Pacific  tells  us  that  :    "The  courts  are  open  to  redress 


58  SHOULD  THE  NATION  OWN   THE  RAILWAYS? 

all  real  grievances  of  the  citizens."  There  is  probably  no  man  in  the  United  States  bet- 
ter aware  than  is  Sidney  Dillon  that  no  citizen,  unless  he  has  as  much  wealtli  as  the 
president  of  the  Uuiun  Piiciflc,  can  successfully  contest  a  case  of  any  importance  in  the 
courts  with  one  of  these  corporations  which  make  a  business,  as  a  warning  to  other  possi- 
ble plaintiflfs,  of  wearing  out  the  unfortunate  plaintifT  with  the  laws  costly  delays;  and 
failing  in  this  do  not  hesitate  to  spirit  away  the  plaintiff's  witnesses,  and  to  pack  and 
buy  juries — retaining  a  special  class  of  attornej's  for  this  work — the  command  of  great 
corporate  revenues  enabling  them  to  accomplish  theireuds,  and  to  utterly  ruin  nearly 
every  man  having  the  hardihood  to  seek  Mr.  Dillon's  lauded  legal  redress,  and  when 
they  have  accomplished  such  nefarious  object  the  entire  cost  is  charged  1  ack  to  the  public 
and  collected  in  the  form  of  tolls  upon  trafHc.  Laws  are  utterly  powerless  to  restrain  the 
corporations,  and  Mr.  Dillon  tells  us  how  easy  it  is  for  them  to  evade  by  pleading  compli- 
ance, when  there  has  been  no  compliance, and  then  having  the  expert  servants  of  the  cor- 
poration Swear  there  has  been. 

With  the  governient  operating  the  railways  every  citizen  riding  would  pay  fare 
adding  immensely  to  the  revenues.  Few  have  any  conception  of  the  proportion  who 
travel  free,  and  half  a  century's  experience  renders  it  doubtful  if  the  pass  evil— so  much 
greater  than  ever  was  the  franking  privileges — can  be  eliminated  otherwise  than  by  na- 
tional ownership.  From  the  experience  of  the  writer  as  an  auditor  of  railway  accounts, 
and  as  an  executive  officer  issuing  passes, he  is  able  to  say  that  fully  ten  per  cent.  tru\el 
free,  the  result  being  that  the  great  mass  of  railway  users  are  yearly  mulcted  some  $30- 
000,000  for  the  benefit  of  the  favored  minority,  hence  it  is  evident  that  if  all  were  required 
to  pay  for  railway  services,  as  they  are  for  mail  services,  the  rates  might  be  reduced  ten 
per  cent,  or  more,  and  the  corporate  revenues  be  no  less,  and  the  operating  expenses  no 
more.  In  no  other  country — unless  it  be  under  the  same  system  in  Canada — are  uine- 
teuths  of  the  people  taxed  to  pay  the  traveling  expenses  of  the  other  tenth.  By  what 
right  do  the  corporations  tax  the  public  that  members  of  congress,  legislators,  judges  and 
other  court  officials  and  their  families  may  ride  free?  Wliy  is  it  that  when  a  legislature 
is  in  session  that  passes  are  as  plentiful  as  leaves  in  the  forest  in  autumn  ? 

The  writer,  as  an  executive  officer  of  a  railway  company  having  authority  to  issue 
passes,  has,  during  a  session  of  the  legislature,  signed  vast  numbers  of  blank  passes  at  the 
request  of  the  legislative  agents  of  such  company  and  under  instructions  of  the  president 
of  the  corporation  to  furnish  such  lobby  agents  with  all  the  passes  they  should  ask  for. 

No  reports  of  passes  issueil  are  made  either  to  state  or  federal  governments,  or  to  con- 
fiding share-holders,  and  should  such  reports  be  asked  for,  by  state  or  nation,  in  order  to 
measure  the  extent  of  this  evil,  the  Sidney  Dillons  would  rush  into  print  and  tell  us  it 
was  a  piece  of  impertinence  for  any  citizen  (or  the  public )  to  enquire  into  the  extent  of 
or  the  manner  in  which  the  corporation  dispensed  tlieir  favors.  Tlie  only  way  to  kill  this 
monster  is  to  put  the  instruments  of  transportation  under  such  control  as  only  national 
ownership  can  give.  Laws  and  agreements  between  the  corporations  have  been  proven, 
time  and  again,  wholly  ineffctive  even  to  lessen  this  great  and  corrupting  evil. 

In  every  conceivable  way  are  the  net  revenues  of  the  corporations  depleted  and 
needless  burthens  imposed  upon  the  public,  but  one  of  the  worst  is  the  system  of  paying 
commissions  for  the  diversion  of  traffic  to  particular  lines,  often  the  least  direct.  The 
more  common  practice  is  to  pay  such  commissions  to  agents  of  connecting  lines  where  it 
is  possible  to  send  the  traffic  over  any  one  of  two  or  more  routes,  and  the  one  which  may, 
by  the  payment  of  such  commission  secure  the  carrying  of  the  passenger  (or  merchan- 
dise) may  be  the  least  desirable,  and  the  one  which  would  never  liave  been  taken  but  for 
the  prevarications  of  an  agent,  bribed  by  a  commission  to  make  false  representations  as  to 
the  desirableness  of  the  route  he  selects  for  the  confiding  passenger. 

This  is  but  one  of  many  phases  of  the  commission  evil,  another  being  that  these 
Bums  are  ultimately  paid,  not  by  the  corporations,  but  by  the  users  of  the  Riil  ways,  and  but 
for  the  payment  of  such  commissions  tlie  rates  might  lie  reduced  in  like  amounts.  Aside 
from  commissions  paid  for  diverting  passenger  traffic  greatsums  are  paid  for  "influencing" 
and  "routing"  freight  traffic,  and  these  sums,  while  paid  to  outsiders,  or  so-called  brok- 
ers, are  frequently  divided  with  railway  officials.     When  the  writer  was  in  charge  of  the 


SHOULD   THE   NATION   OWN    THE    RAILWAYS?  59 

transportation  Accounts  of  a  railway  running  east  frcm  Chicago,  it  was  a  part  of  bis  duties 
to  certify  to  the  correctness  of  the  vouchers  on  wliich  commission  puymcnts  were  made, 
and  he  became  aware  of  the  fact  that  one  Cliicago  brokerage  firm  was  being  paid  a  com- 
mission of  from  tliree  to  five  cents  per  liiaulred  pounds  on  nearly  all  the  flour,  grain, 
packing  house,  anddistillery  products  being  shipped  out  of  Chicago  over  this  railway,  no 
matter  where  such  shipmeut  might  originate,  uiariy  of  them,  in  fact,  originating  on  and 
far  west  of  the  Mississippi  river,  and  when  he  objected  to  certifying  to  shipments  with 
which  it  was  clear  that  ihf  Chicago  parties  could  have  had  nothing  to  do,  he  was  told  by 
the  manager  that  his  duties  ended  when  he  had  ascertained  and  certified  that  such  ship- 
ments had  been  made  from  Chicago  station.  From  investigatious  instituted  by  the 
writer,  he  soon  learned  that  some  one  connected  with  the  management  was  deeply  inter- 
ested in  the  payment  of  the  largest  sums  possible  as  commission. 

The  corporations  have  ineirectually  wrestled  with  the  commission  evil,  and  any 
number  of  agreements  have  been  entered  into  to  do  away  with  it;  but  it  is  so  thoroughly 
entrenched,  and  so  many  of  their  otficials  have  an  interest  in  its  perpetuation,  that  they  are 
utterly  powerless  in  the  presence  of  a  system  which  imposes  great  and  needless  burthens 
upon  their  patrons,  but  which  will  die  the  day  the  government  takes  possession  of  the 
railways,  as  then  there  will  be  no  corporations  ready  to  pay  for  the  diversion  of  trafBc. 
National  ownership  alone  can  dispose  of  an  administrative  evil  that,  from  such  data  as  is 
obtainable,  appears  to  cost  the  public  from  $20,000,000  to  $25,000,000  per  annum. 

Mr.  Meany,  in  his  Sun  article,  sumiuarizes  six  causes  for  the  diminution  of  rail^'ay 
dividends  and  remarks:  "It  is  unnecessary  to  dwell  at  any  great  length  upon  the  first 
five  mentioned  reasons,  but  too  much  could  not  be  said  on  the  sixth.  It  is  now  nearly 
seven  years  since  James  McHeury  of  London  (and  New  YorS,  Pennsylvania  and  Ohio 
Rjulway  litigation  fame)  openly  charged  railway  managers,  in  an  interview  published 
in  the  Sun,  with  criminal  collusion  in  the  matter  of  securing  extraordinany  privileges 
and  unapproachable  contracts  with  their  several  corporations  for  favored  fast  freight 
lines,  expn  ss  routes,  bridge  conapauies,  etc.,  etc.,  in  all  the  benefits  of  which  such  mana- 
gers shared  to  a  very  great  extent.  On  that  occassiou  Mr.  McHenry  was  promptly  cried 
down.     Would  he  be  cried  down  to-day  ?  " 

As  a  rule  American  railways  pay  the  highest  salaries  in  the  world  for  those  en- 
gaged in  directing  business  operations,  but  such  salaries  are  not  paid  because  trans-ceud- 
ant  talents  are  necessaiy  to  conduct  the  ordinary  operationsof  railway  administration, 
but  for  the  purpose  of  check-mating  the  chicanery  of  corporate  competitors.  In  other 
words,  these  exceptionally  high  salaries  are  paid  for  the  purpose,  and  because  their  recipi- 
ents are  believed  to  have  the  ability  to  hold  up  their  end  in  unscrupulous  corporate  war- 
fare where,  as  one  railwaj'  president  expressed  it,  "the  greatest  liar  conies  out  ahead." 
With  the  government  operating  the  railways,  there  would  be  no  conflictiug  interests 
necessitating  the  employment  of  such  costly  officials  whose  diplomatic  talents  might  well 
be  dispensed  with,  while  the  running  of  trains,  and  the  conduct  of  the  real  work  of  opera- 
ting the  roads,  could  be  left  to  the  same  officials  as,  at  moderate  salaries,  now  perform 
such  duties,  and  consolidation  of  all  the  conflicting  interests  in  the  hands  of  the  govern- 
ment will  enable  the  people  to  dispense  with  the  services  of  the  high-priced  managers 
now  almost  exclusively  engaged  in  "keeping  even  with  the  other  fellow"  as  well  as  with 
the  costlj'  staffs  assisti.ig  such  managers  in  keeping  even,  and  the  savings  resulting  may 
be  estimated  at  from  $-1,000,000  to  ;f5,000,000  per  year. 

Government  control  will  enable  railway  users  to  dispense  with  the  services  of  such 
high-priced  umpires  as  Mr.  Aldace  F.  Walker,  as  well  as  of  all  other  officials  of  68  traffic 
associations,  fruitlessly  laljoriug  to  prevent  each  of  500  corporations  from  getting  the  start 
of  its  fellows,  and  trying  to  prevent  each  of  the  5(  0  from  absorbingan  undue  share  of  the 
traffic.  Itappears  that  each  of  these  costly  peac(-n  akiug  attachments  has  an  average  of 
seven  corporations  to  watch. 

Referring  to  traffic  associatif  n^,  and  the  r  vain  endeavors  to  keep  the  corporations 
within  sight  of  cemmercial  ethics  the  Interstate  Commerce  Comnji^sion  says:  "But  the 
most  important  provisions  of  the  law  have  not  so  often  been  directly  violated  as  they 
have  been  nullified  through  devices,  carefully  framed  with  legal  assistance, — here  is  one 


60  SHOULD   THE    NATION   OWN  THE   RAILWAYS? 

•of  the  places  where  the  high-priced  lawyer  gets  iti  his  work— with  a  view  to  this  very  eud, 
and  in  the  belief  that  when  brought  to  legal  test  the  device  hit  upon  would  not  be  held  by 
the  couitfi  to  be  so  distinctly  opposed  to  the  terms  of- the  law  as  to  be  criminally  punish- 
able." In  this  couuectiou  it  is  well  to  remember  what  Mr.  Dillon  tells  us  of  the  ease 
with  which  the  laws  can  be  evaded. 

With  national  ownership  the  expenditures  involved  in  the  maintenance  of  traffic 
associations  would  be  saved  and  railway  users  relieved  of  a  tax  that,  judging  from  the  re- 
ports of  a  limited  number  of  corporations  of  their  contributions  towards  the  support  of 
such  organizations,  must  annually  amount  to  between  four  and  five  million  dollars. 

Of  the  six  hundred  corporations  operating  railways  probably  five  hundred  main- 
tain costly  general  oflices  where  president,  treasurer  and  secretary  spend  the  time  sur- 
rounded by  an  expensive  staff".  The  majority  of  such  ofiices  are  off  the  lines  of  the  respeeli  ve 
corporations  in  the  larger  cities  where  high  rents  are  paid  and  great  expenses  are  entailed 
that  proper  attention  may  be  given  to  the  bolstering  or  depressing  the  price  of  the  cor- 
poration's shares  as  the  management  may  be  long  or  short  of  the  market.  So  far  as  the 
utility  of  the  railways  is  concerned,  as  instruments  of  anything  but  speculation,  such  of- 
.fice:?  and  officers  might  as  well  be  located  in  the  moon  and  their  cost  saved  to  the  public. 
The  average  yearly  cost  of  sucli  offices  and  officers  is  more  than  $.50,000  and  the  transfer 
of  the  railways  to  the  nation  would,  in  this  matter  alone,  effect  an  annua!  saving  of  more 
than  ?2.5.000,000  as  both  offices  and  officials  could  be  dispensed  with  and  the  service  be  no 
less  efficient. 

Moreover,  with  the  nation  owning  the  railways,  the  indirect  but  no  less  onerous 
tax  levied  upon  the  industries  of  the  country  by  the  thousands  of  speculators  who  make 
day  hideous  on  the  stock  exchanges  would  be  abrogated,  as  then  there  would  be  neither 
railway  share  or  bond  for  these  harpies  to  make  shuttle-cocks  of,  and  this  would  be  an- 
other economy  due  to  such  ownership. 

Railways  spend  enormous  sums  in  advertising,  the  most  of  wbicli  national  owner- 
ship would  save,  as  it  would  be  no  more  necessary  to  advertise  the  advantages  of  any  par- 
ticular line  than  it  is  to  advertise  the  advantages  of  any  given  mail  route.  From  reports 
made  by  railway  cjrporations  to  some  of  the  Western  States,  it  appears  that  something 
over  one  per  cent,  of  operating  expenses  are  absorbed  in  advertising,  aggregating  some- 
thing liUe  ?7, 000 ,000  per  year,  of  which  we  may  assume  that  but  $5,000,000  would  be  saved, 
as  it  would  be  still  desirable  to  advertise  train  departures  and  arrivals. 

A  still  greater  expense  is  involved  in  the  maintenance  of  freight  and  passenger 
offices  ofl;"  the  respective  lines,  for  the  purpose  of  securing  a  portion  of  the  competitive 
traffic.  In  this  way  vast  sums  are  expended  in  the  payment  of  rents  and  as  salaries  of 
hordes  of  agents,  solicitors,  clerks,  etc.,  etc.  Taking  the  known  expenditures  for  tliis  pur- 
pose of  a  given  mileage,  it  is  estimated  that  the  aggregate  is  not  less  than  $15,000,000 
yearly,  all  of  which  is  a  tax  upon  the  public  that  would  be  saved  did  the  government  op- 
erate the  railways. 

Under  government  control  discriminations  against  localities  would  cease,  whereas 
now  localities  are  discriminated  against  because  managers  are  interested  in  real  estate 
elsewhere  or  are  interested  in  diverting  traffic  in  certain  directions.  Again,  under  cor- 
porate management,  it  is  for  the  interest  of  the  company  to  haul  a  commodity  as  far  as 
possible  over  its  own  lines  (with  the  government  owning  all  the  lines  this  motive  will 
lose  its  force)  and  thus  traffic  is  forced  into  unnatural  channels.  For  instance,  much  of 
the  grain  from  Kansas  should  find  its  way  to  foreign  markets  via  the  short  route  to  the 
Gulf,  the  distance  to  tide  water  by  this  route  being  less  than  half  what  it  is  to  the  Atlantic; 
yet  so  opposed  to  this  natural  route  are  the  interests  of  the  majority  of  the  corporations 
controlling  the  traffic  associations  which  now  dictate  to  the  people  what  routes  their  traffic 
shall  take,  that  the  rates  to  the  Gulf  are  kept  so  high  as  to  force  the  traffic  to  the  lakes 
and  to  the  Atlantic,  and  as  all  the  railways  leading  to  the  Gulf  have  lines  running  east- 
Mard,  the  much  lauded  corporate  competition  fails  to  help  out  the  citizens  of  Kansas, 
who  are  subjected  to  the  domination  of  the  new  tyrant  denominated  a  "Traffic  Associa- 
tion." With  the  nation  operating  the  railways  all  this  would  be  changed  and  localities 
favorably  located  would  be  abls  to  reap  the  benefits  which  such  location  should  give,  and 
should  such  a  condition  ever  obtain  the  farmers  of  Western  Iowa  will  not  then  shin  corn 


SHOULD  THE   NATION  OWN  THE  RAILWAYS?  61 

to  the  drouth-stricken  portion  of  Kansas  fcir  fifteen  cents  per  one  hundred  pounds  wliile 
the  Kansas  corn-grower,  living;  within  seventy-five  miles  of  (he  same  market,  is  charged 
ten  cents  per  one  hundred  pounds  for  a  haul  onc-eijrlith  as  lon>;;.  By  such  rates  the  rail- 
ways force  the  hauling  of  corn  from  Iowa  to  Wes'cn  Kansas,  and  then  force  the  corn- 
grower  of  Central  Kansas  to  send  his  corn  eastward,  the  result  being  two  long  haids 
where  one  short  one  would  suffice,  but  then  the  corporations  would  have  absorbed  less  of 
the  substance  of  the  people. 

Another  and  incalculable  benefit  which  would  result  from  national  ownership 
would  be  the  relief  of  state  and  national  legislation  from  the  pressure  and  corrupting  prac- 
tices of  railway  corporations,  which  constitute  one  (if  the  greatest  dangers  to  which  re. 
publiciin  institutions  can  be  subjected.  This  alone  renders  the  nationalization  of  the  rail- 
ways most  desirable,  and  at  the  same  time  such  nationalization  would  have  the  effect  of 
emancipating  a  large  part  of  the  press  from  a  galling  thraldom  to  the  corporations. 

With  the  nation  operating  the  railways  we  may  have  some  hope  that  rates  will  be 
reduced  by  some  system  resembling  the  Hungarian  zone,  which  has  had  the  efTect  of  re- 
ducing local  passenger  rates  about  forty  per  cent.,  resulting  in  such  an  increase  of  tratflc 
as  to  greatly  increase  the  revenues  of  the  roads,  the  average  of  rates  liy  ordinary  third-class 
trains  being  about  three-fourths  of  a  cent  per  mile,  and  one  and  a  half  cents  per  mile  for 
first-class  express  trains. 

In  Victoria  the  parcel  or  express  business  is  done  by  the  government  railways,  and 
the  rates  are  not  one-half  what  they  are  with  us  when  farmed  out  to  a  second  lot  of  cor- 
porations. Space  does  not  permit  the  discussion  or  even  the  statement  of  the  many  salu- 
tary phases  of  government  control  as  developed  in  the  various  countries  of  Europe,  and 
it  is  not  necessary  as  there  are  abundant  rrasons  to  be  found  in  conditions  existing  at 
home  for  making  the  proposed  change. 

By  far  the  most  menacing  feature  of  continued  corporate  ownership  isthe  power 
over  the  money  markets,  which  it  places  in  the  hands  of  unscrupulous  men,  any  half 
dozen  of  whom  can,  at  such  a  time  as  that  following  the  failure  of  the  Barings,  destroy 
the  welfare  of  millions  and  plunge  the  country  into  all  the  horrors  of  a  money  panic. 
Whether  it  be  true  or  not  there  are  many  who  believe  that  a  small  coterie  who  had  in- 
formation before  the  public  of  the  condition  of  Baring  Brothers,  and  that  a  block  of  many 
millions  of  railway  securities,  held  by  that  house,  were  being  (or  soon  would  be)  pressed 
upon  the  market,  entered  into  a  conspiracy  for  the  purpose  of  locking  up  money,  and 
thereby  depressing  prices  in  order  to  secure,  at  low  cost,  the  control  of  certain  coveted 
railways.  The  railways  were  secured,  and  the  e  is  not  much  doubt  that  they  had  been 
lying  in  wait  for  such  a  critical  condition  of  the  money  markets  to  accomplish  this  pur- 
pose, which  still  further  enhances  their  power  for  evil.  With  the  railways  nationalized 
not  only  would  there  be  no  temptation  for  such  nefarious  operations  but  the  power  of 
such  men  over  values  would  be  greatly  lessened  if  not  wholly  destroyed  as  there  would 
be  no  railway  shares  for  them  to  play  fast  and  loose  with  and  as  money,  instead  of  being 
tied  up  in  loans  on  chromos  representing  little  but  water  would  seek  investment  in  bona- 
flde  enterprises  their  operations  would  have  little  influence  and  would  certainly  have  no 
such  baleful  power  over  the  industries  of  the  country  as  their  ability  to  affect  the  value  of 
railway  shares — on  which  such  immense  sums  are  now  loaned  on  call — gives  them  they 
being  able,  by  locking  up  a  few  millions  when  the  money-market  is  in  the  condition 
which  obtained  at  the  time  of  the  Baring  collapse,  to  force  the  calling  of  loans  and  the 
slaughtering  of  vast  numbers  of  shares  carrying  the  control  of  the  railways  they  covet. 
If  only  for  the  purpose  of  divesting  "the  dangerous  wealthy  classes"  of  this 
frightful  power,  national  ownership  would  be  worth  many  times  its  cost,  and  without 
such  ownership  a  score  of  manipulators  are  soon  likely  to  be  complete  masters  of  the  re- 
public and  all  its  industrial  interests;  hence  the  question  reverts  to  the  form  stated  in  the 
opening  of  this  paper:  Shall  the  nation  accept  as  a  master  a  polBical  party  that  may  be 
dislodged  by  the  use  of  the  ballot  or  shall  the  republic  be  dominated  by  a  master  in  the 
form  of  a  score  of  unscrupulous  Goulds,  Vanderbilts  and  Huntingtons  who  cannot  be  dis- 
lodged and  who  never  die? 


62  SHOULD  THE    NATION  OWN   THE   RAILWAYS? 

Assuming  that  J!30  000  per  mile  is  the  maximum  cost  of  existing  raiI^^•ays— as  is 
shown  in  "The  Arena"  ior  February— and  that  tliere  are  160,000  miles,  it  would  give 
a  total  valuation  of  $4,800,000,000,  but  that  there  may  be  uo  compluint  that  the  nation  ia 
dealing  unfairly  with  the  owners  of  much  water,  it  will  be  well  to  add  25  per  cent,  to 
what  will  be  found  to  be  the  outside  value  of  the  railways  when  condemned  under  the 
law  of  eminent  domain,  and  assuming  that  $6,000,000,000  of  three  per  ceut.  bonds  are  is- 
sued in  order  to  make  payment  therefor,  and  it  involves  an  interest  charge  of  1180,000,000, 
to  which  add  $670,000,000,  as  the  cost  of  maintenance  and  operation,  and  $50,000,000  as  a 
sinking  fund,  and  we  have  a  total  annual  cost  for  railway  service,  of  4900,000,000  as  against 
a  present  cost  of  $1,050,000,000  ($950,000,000  from  traffic  earnings,  and  |85, 000,000  from 
other  sources  of  railway  revenue),  resulting  in  a  net  annual  saving  to  the  public  of  J150, 
000.000,  to  which  must  be  added  the  various  savings  which  it  has  been  estimated  would 
result  from  government  control,  and  which,  for  the  convenience  of  the  reader,  are  here 
recapitulated,  namely: 

Saving  from  consolidation  of  depots  and  stafTs S  20,000.000 

Saving  from  exclusive  use  of  shortest  routes 25,000,000 

Saving  in  attorneys' salaries  and  legal  expenses 12,000,000 

Saving  from  the  abrogation  of  the  pass  evil .30,000,000 

Saving  from  the  abrogation  of  the  commission  system 20  000,000 

Saving  by  dispensing  with  high  priced  managers  and  staffs ■1.000  000 

Saving  by  disbanding  traffic  associations 4.000,000 

Saving  l;)y  dispensing  with  presidents,  etc 25,000,000 

Saving  by  abolisliing  (all  but  local)  offices,  solicitors,  etc 15,000.000 

Saving  of  five-sevenths  of  the  advertising  account 5,000,000 

Total  savings  by  reason  of  better  administration $160,000,000 

It  would  appear  that  after  yearly  setting  aside  $50,000,000  as  a  sinking  fund,  that 
there  are  the  best  of  reasons  for  believing  that  the  cost  of  the  railway  service  would  be 
$310,000,000  less  than  under  corporate  management. 

That  16,000,000,000  is  much  more  than  it  would  cost  to  duplicate  existing  railways, 
will  not  be  questioned  by  the  disinterested  familiar  with  late  reductions  in  the  cost  of 
construction,  and  that  such  a  valuation  is  excessive  is  manifest  from  the  fact  that  it  is 
much  more  than  the  market  value  of  all  the  railway  bonds  and  shares  in  existence. 

Mr.  John  P.  Meany,  in  the  RaUtvay  Review  of  February  7th,  1891,  says:  "It  ia 
safe  tc  assume  tlwt  the  market  valuation  of  the  entire  $4, .500,000,000  of  railroad  stock  in 
existence  would  not  average  more  than  $30  per  share,  or  say  $1,350,000,000  in  all."  And 
in  his  Sun  article  he  states  that  fully  $.500,000,000  of  this  stock  is  duplicated,  so  that  the 
"live"  capital  stock  outstanding  is  really  but  $4,000,000,000.  which,  at  .^.'iO  pershare,  would 
have  an  aggregate  value  of  $1,200,000,000.  Mr.  ISIeanj'  states  that  there  are  also  duplica- 
tions of  bond  issues  amounting  to  some  $300,000,000,  leaving  the  live  outstanding  bonds 
at  $4,500,000,000,  and  many  corporations  failing  to  pay  interest,  some  issues  are  selling  as 
low  as  12  per  cent,  of  par,  making  it  safe  to  call  the  average  market  value  of  bonds  90  per 
cent,  of  their  face  value,  and  their  aggregate  value  $4,050,000,000.  to  which  adil  value  of 
"live"  capital  stock,  $1,200,000,000,  and  the  total  market  value  of  bonds  and  stock  is  $5,. 
250,000,000,  being  at  the  rate  of  $32,800  per  mile  for  the  160,000  miles  in  operation. 

After  many  years  of  familiarity  with  the  turgid  and  obscure  statements  issued  by 
American  railway  corporations,  and  which  are  usually  of  such  a  character  that  the  more 
they  are  studied  the  less  the  shareholder  knows  of  the  affairs  of  the  corporation,  it  is 
very  refreshing  to  read  the  report  of  the  Railway  Commissioners  of  any  one  of  the  Austra- 
lian colonies,  where  every  item  of  expenditure  is  made  clear,  and  where  words  are  not 
used  for  the  purpose  of  misleading. 

The  last  Victorian  report  shows  this  new  and  sparsely  settled  country  as  able  to 
borrow  money,  with  which  to  build  national  railways,  at  3J  per  cent,  per  annum.  How 
many  American  corporations  are  able  to  borrow  money  at  such  a  rate?  'I'li is  saving  in 
fche  interest  charge  di»etly  benefits  the  public,  and  is  due  to  national  ownciship,  and  a 
like  saving  will  be  made  by  the  nationalization  of  American  railways. 

This  report  also  shows  that  while  the  country  is  so  rugged  that  in  many  cases  the 
gradients  are  as  great  as  130  feet  per  mile,  and  the  cost  of  labor  and  supplies  more  than 


SHOULD  THE   NATION  OWN  THE   RAILWAYS?  63 

here,  the  roads  are  operated  at  less  cost,  as  measured  by  the  expense  per  train  mile,  than 
In  the  favored  regions  of  the  United  States.  The  Kansas  City,  Fort  Scott  and  Memphis 
Railway  is,  admittedly,  one  of  the  best  managed  and  most  economically  operated  raihvayg 
in  the  West,  and  with  an  abundance  of  very  cheap  coal,*  low  gradients  and  running  more 
trains  than  do  the  Victorian  railways,  should  be  operated  much  more  cheaply,  yet  the 
cost  of  operating  this  road,  as  measured  by  the  cost  per  train  mile, — and  this  is  the  best 
possible  criterion  of  economj'  in  operation — is  one-third  greater  than  on  the  government 
owned  railways  of  Victoria. 

An  excellent  measure  of  the  efficiency  of  the  management  is  the  number  of  casual- 
ties, as  proportioned  to  tlie  number  of  passengers  carried  and  men  employed,  wliich  is 
very  great  in  such  countries  as  Russia,  Roumania  and  Portugal;  butin  Victoriaand  other 
Australiari  colonies,  the  proportion  isfarless  than  in  the  United  States,  more  attention  be- 
ing given  to  the  adoption  of  such  safety  devices  as  interlocking  switches,  etc.,  and  all 
the  stations  and  crossings  are  provided  with  gates  and  otherwise  better  guarded  than 
with  us  where  the  corporations  are  much  more  intent  upon  paying  dividends  than  in 
serving  thepul)lic,  or  in  saving  life  and  limb,  while  on  the  government  operated  railways 
of  Victoria,  the  management  devotes  its  attention— with  due  regard  to  economy— to  the 
Convenience,  comfort  and  safety  of  railway  users,  and  employes,  having  no  bond  or  share- 
holders to  provide  for. 

In  the  United  States  one  of  the  useless  traffic  associations  pays  its  chief  umpire 
nearly  as  much  as  Victoria  pays  its  entire  commission. 

Those  desirous  of  entering  the  railway  service  of  Victoria  arc  subjected  to  such 
rigid  examination  as  to  qualifications  and  character,  that  but  little  more  than  one-third 
are  able  to  p.ass  the  ordeal,  and  a  high  standard  of  excellence  in  the  personnel  of  the  service 
results,  and  when  these  servants  are  disabled,  or  worn  out  by  long  service,  they  are  pen- 
sioned or  given  a  retiring  allowance,  and  this  system  tends  to  reduce  the  inclination  to 
strike,  as  a  man  who  has  been  years  in  the  service  will  long  hesitate  before  he  forfeits  his 
right  to  a  provision  of  this  kind. 

All  the  Australian  reports  and  accounts,  which  liave  come  under  the  observation 
of  the  writer,  are  models  of  conciseness  and  clearness  and  show  that  there  is  nothing  in- 
herent in  railway  accounts  rendering  it  necessary  that  they  be  made  obscure  and  mis- 
leading. 

Neither  in  tlie  Australian  reports  nor  in  the  Colonial  press  is  there  the  least  evidence 

of  discriminations  against  individuals  or  localities,  and  this  one  fact  is  an  argument  of 

greater  forcein  favor  of  national  ownership  than  all  that  have  everbeen  advanced  against  it. 

•Co.al  on  tlie  line  iiamerl  Is  worth  about  $1.50  per  ton  at  the  mines,  while  inferior  coal  Is  worth  $3.75 
per  ton  at  the  mines  in  Victoria. 


THE   ECOXO.MLST'S   OPINION    OF   MARKET   WRECKING. 

The  claim  is  persistently  made,  by  the  opponents  of  the  Butterworth  bill,  that 
short-selling  can  in  no  wise  injure  the  producer  of  cotton,  grain  and  other  staple  produetsi 
but  on  the  other  hand  is  a  great  and  inestimable  benefit  to  the  producer,  and  that  the 
agitation  of  the  subject  is  carried  on  by  demagogues  for  the  purpose  of  irritating  the 
farmer  and  leading  him  to  place  Itimself  in  opposition  to  the  very  men  who,  by  their 
sliort-selling,  create  a  market  for  his  products  and  enable  him  to  secure  a  better  price. 
Without  asking  if  the  practice  of  short-.selling  can  possibly  increase  the  number  of  con- 
sumers or  tlie  per  capita  consumption,  a  sufficient  answer  to  all  that  lias  ever  been  ad- 
vanced in  favor  of  short-selling  is  to  be  found  in  the  Juue  20th  issue  of  so  pronounced  an 
organ  of  Chicago  interests  as  the  Chicago  Eoonomiat,  where  it  is  said,  editorially,  that: 


64  THE  ECONOMIST'S   OPINION   OF  MARKET  WRECKING. 

"This  is  the  season  wlien  farmers  begin  to  grnnilile  ii,a::iinst  Boards  of  Trade,  and 
assert  that  sliort-sellers  are  engaged  in  their  usual  efl'ort  to  nialce  a  low  market  for  farm 
products.  There  is  some  ground  for  their  irritation.  It  is  po?sible  that  the  system  nf 
trading  in  futures,  now  so  popular,  has  been  carried  to  an  abuse.  *  *  »  *  It  is  within 
the  range  of  possibility  that  the  Exchanges  may  be  brought  to  see  that  after  all  a  change 
in  the  system  of  trading  may  not  operate  to  their  disadvantage.  It  may  be  found  possible 
to  trade  in  grain  (and  cotton)  on  a  cash  basis,  as  stoclis  are  traded  in  on  the  New  York 
Exchange.  No  pretense  is  made  that  the  volume  of  speculation  is  curtailed  to  any  im- 
portant extent  in  stoclo,  by  reason  of  the  fact  that  all  transactions  are  strictly  for  cash 
*  *  *  *  The  seller  of  stocks  may  not  have  the  stocks  to  deliver  at  the  time  he  makes 
the  trade,  but  he  must,  in  some  manner,  procure  them.  *  *  *  *  If  he  does  not  al- 
ready own  them,  he  does  this  by  borrowing  the  stocks  and  paying  therefor  a  small  per- 
centage, which  percentage  is  regulated  by  the  urgency  of  the  demand  from  short-sellers. 
Why  could  not  this  plan  be  put  in  force  in  regard  to  grain,  (cotton,  etc.)?  Would  not 
such  a  system  result  in  equalizing  the  carrying  charges,  which  are  u  serious  handicap  upon 
investors  and  icjyon  the  property  itself? 

Under  existing  conditions  grain  and  cotton  is  burthened  with  a  taxfrotn  the  moment 
the  seed  is  put  in  the  ground.  This  tax  does  not  begin  to  accumulate,  apparently,  until 
the  grain  has  left  the  harvest  field  and  is  on  the  way  to  the  great  markets.  But  as  a 
matter  of  fact,  the  property  is  handicaped  from  its  inception. 

Investors  and  producers  have  the  burthen  to  carry,  and  the  short-sellers  have  the 
advantage  to  the  extent  of  the  full  accumulation  of  charges  of  all  sorts — transportation, 
storage,  insurance,  commissions,  etc.  They  (the  short-sellers)  figure  that  the  pr&ptrty 
cannot  carry  this  burthen  and  advance  to  a  point  beyond  it  which  will  give  the  holders  of 
the  ( real )  property  a  profit. 

They  argue  generally  that  grain  ( and  cotton  )  will  not  be  worth  any  more  one,  twO' 
or  six  months  hence  than  now,  and  that  they  have  just  the  advantage  over  investors  aud 
producers  which  is  represented  by  all  these  accumulated  charges  (as  they  invest  nothing 
in  the  sort  of  stuff  in  which  they  deal )  hence  they  feel  a  certain  degree  of  safety  in  ofl'er- 
ing  property  (promises  )  for  future  delivery  at  prices  which  pays  them  a  liberal  premium, 
thereby  gaining  all  these  carrying  chargesjusf  as  surely  us  if  they  owned  the  elevators  in 
which  the  grain  was  stored,  the  railroads  upon  which  it  was  carried  and  the  insurance 
companies  and  banks  which  collect  additional  tolls. 

If  the  short-seller.s  were  compelled  to  deliver  the  grain  they  sell  and  pay  the  owner 
a  per  cent,  for  (he  property  to  deliver  on  contracts  the  carrying  charges  would  be  fairly 
equalized  in  the  long  run. 

Possibly,  also,  this  process  might  result  in  filling  the  warehouses  with  grain,  for 
capital  will  find  profitable  employment  in  investments  in  huge  quantities  of  grain  as  a 
basis  for  such  operations.  (And  this  would,  at  such  seasons  as  when  more  grain  was  be- 
ing marketed  than  was  required  for  immediate  consumption,  relieve  the  market  of  undue 
pressure). 

"Excessive  short-selling  (all  short-selling  is  excessive )  which  is  beyond  any  question 
a  burthen  upon  production,  and  a  serious  handicap  upon  investment  of  *  *  *  capital 
would  be  measurably  reduced  *  *  *  and  the  onerous  feature  would  be  measurably 
eliminated.     ( If  it  is  a  wrong  why  not  eliminate  it  wholly). 

"A  little  experience  might  relieve  the  speculative  trade  of  the  horror  which  it  now 
feels  of  contact  with  the  actual  grain.  *  *  *  *  A  system  of  cash  dealings  would  cer- 
tainly give  the  producer  an  even  chance  with  the  short-seller,  which  he  does  not  now  en- 
joy-" 

"The  strangulation  of  the  Butterworth  bill  last  winter  merely  postponed  action;  it. 
did  not  kill  the  sentiment  that  was  bacli  of  it,  or  remove  the  grievance." 


C.  A.  PILLSBURY'S  OPINION  OF  MARKET  WRECKING. 

The  ulterauces  of  an  organ  of  Chicago  interests,  in  tlie  best  sense  of  the  term,  may 
well  be  supplemented  by  the  opinion  of  one  who  is.  beyond  a  doul)t,  the  greatest  dealer  in 
the  world  in  the  products  of  the  soil,  aud  one  who  yearly  grinds  more  than  half  as  much 
actual  wheat  into  flour  as  reaches  the  Chicago  markets. 

The  following  eseerpts  are  made  from  an  interview  witii  Mr.  C.  A.  Pillsbury,  pub- 
lished in  the  Minneapolis  Daih/  Market  Jiecord: 

"While  talking  with  respect  to  the  matter  of  limitation  of  wheat  production,  so 
that  for  the  last  three  years  there  has  been  a  decrease  of  the  reserves,  Mr.  C.  A.  Pillsbury, 
the  miller,  says:  '  If  the  world  was  entirely  out  of  wheat  at  the  end  of  this  crop,  imd  our 
crop  was  only  eleven  months'  supjily,  under  the  old  method  of  doing  business  wheat 
would  .sell  at  from  $1.50  to  |2  per  bushel,  but  under  the  new  method  the  heavy  short-seller 
in  Chicago  would  sell  10,000,000  or  1-5,000,000  bushels  out  while  he  was  talking  higher 
markets,  and  then  on  some  weak  spot  sell  two  or  three  millions  more  whe»  there  was  no 
demand  for  it,  in  order  to  break  the  markets  down  to  60  or  70  cents  a  bushel,  then  buy  in 
his  short  sales,  and  this  would  discnurage  all  holders  of  wheat,  until  the  scarcity  was  ac- 
tually felt  aud  there  was  hardly  anyone  holding  any  wheat  to  get  the  benefit  of  the  ad- 
vance. 

•'Mr.  C.  Wood  Davis,  in  a  recent  elaborate  article  in  the  "Arena"  gave  his  conclus- 
ions that  the  consumption  of  wheat  throughout  the  world  had  already  overtaken 
production,  and  at  so  earlj'  a  date  as  1896  the  United  States  will  have  ceased  to  e.xport 
wheat." 

"In  reference  to  Mr.  Davis'  idea  Mr.  Pillsbury  said:  /  think  Mr  Davis'  theory  is 
right,  but  it  will  not  do  any  one  much  good,  no  matter  hoiv  short  the  crops  are,  until  short- 
selling  of  wheat  by  those  ivho  do  not  own  a  bushel  can  be  stopped.  As  I  said  before,  farm- 
ers may  talk  about  railroad  and  elevator  charges,  but  if  the  elevators  handled  their  wheat 
for  nothing  aud  railroads  hauled  it  without  compensation,  these  benefits  would  not  be- 
gin tooflfset  the  injuries  which  they  receive  from  the  Board  of  Trade." 

''My  opinion  is  that  we  have  been  eating  uji  the  wheat  reserve  duriiig  the  last  five 
years  and  that  at  the  end  of  the  last  crop  the  visible  (sujyply)  all  over  the  world  was  about 
as  low  as  practicable  on  even  the  new  method  of  doing  business  and  carrying  stock,  and  I 
shall  be  surprised  if  before  a  new  crop  is  fit  to  use,  we  do  not  see  a  worse  situation." 

■'As  long,  however,  as  this  short  selling  is  not  circumscribed  by  the  strong  arm  of 
the  law  these  advances  in  wheat  will  only  come  at  the  latter  end  of  the  crop  year  when 
farmers  have  sold  nearly  all  their  grain,  and  when  neither  the  farmers  nor  the  mercantile 
communities  nor  the  business  men  in  the  State  wifl  get  the  benefit  of  the  fact  that  the 
world  is  not  producing  as  much  bread-stufl'as  it  is  consuming." 


-<•**■- 


THE  MARKET  WRECKER  PREVENTS  AN  ADVANCE  IN  VALUES. 

Not  only  is  the  world  short  of  food  by  reason  of  a  deficient  cultivaleil  acrea;. e,  but 
the  disaster  which  has  befallen  the  crops  of  Europe  renders  it  certain  that  the  last  of  the 
reserves  will  disappear  and  the  grain  harvested  in  1892  go  into  empty  granaries,  and  Ihiit 
the  supplies  for  the  1892-3  cereal  year  will  be  trenched  upon  by  enormous  drafls  made 
upon  India,  South  America  and  Australasia,  early  in  1892.  for  the  purpose  of  fteding  the 
famishing  people  of  Europe  and  this  exhaustion  of  all  reserves;  ihe  trenching  upon 
future  supplies  an<l  the  well  established  deficient  acreage  would  assure  high  prices  fcr  a 
long  term  of  years  but  for  shoit  selling  upon  the  Boards  of  Trade,  such  practices  cousli- 


66     THE  MARKET  WRECKER  PREVENTS  ADVANCE  IN  VALUES. 

tuting  an  evil  of  great  magnitude  as  well  as  a  great  menace  to  the  prosperity  of  t)ie 
farmer,  and,  by  lessening  his  purchasing  power,  a  like  menace  to  the  prosperity  of  all  em- 
ployed in  production  or  distribution. 

So  long  as  the  marljet  wrecking  option  dealer,  without  owning  or  controlling  a 
pound  of  the  products  that  he  offers  to  sell  in  limitless  (luantities,  can  determine  prices 
by  placing  his  fictitious  products  in  competition  with  the  products  of  the  farm,  just  .so 
long  will  the  fiirmer  be  uncertain  of  a  reward  for  the  labor  and  capital  employed,  and 
just  so  long  will  short  periods  of  great  commercial  activity  be  followed  by  prolonged  ones 
of  stagnation. 

The  immoral  practices  of  the  short-seller  have  yearly  deprived  the  farmer  of  from 
ten  to  twenty-five  per  cent,  of  the  price  he  otherwise  would  have  obtained  for  his  products, 
and  in  this  way  his  purchasing  power  has  been  greatly  lessened,  resulting  in  equal  loss  to 
the  artisan, 'laborer,  manufacturer,  merchant  and  transporter,  and  a  like  loss  is  menaced 
so  long  as  the  short-selling  market  wrecker  is  permitted  to  pursue  the  nefarious  calling  o' 
placing  his  fictions  in  competition  with  the  products  of  the  farm. 

It  requires  land  upon  which  to  grow  real  products,  and  in  the  United  States  there 
is  employed  in  the  production  of  food,  fiber  and  forage  700,000,000  acres,  or  more,  and 
every  pound  of  the  products  of  the  soil  which  the  farmer  offers  represents  the  expend- 
iture of  a  definite  amount  of  money  and  labor,  and  the  volume  of  product  which  he  can 
offer  is  limited  by  the  amount  of  land  in  cultivation,  its  fertility  and  meteorological  con- 
ditions which  last  reader  the  result  sufficiently  uncertain  without  the  baleful  work  of  the 
sliort-seller.  On  the  other  hand  the  short-selling  market  wrecker  neither  owns  nor  needs 
land;  he  expends  no  money  in  producing  what  he  offers;  neither  does  he  toil;  his  crop  is 
subject  to  no  climatic  contingencies;  is  harvested  without  labor,  and  the  amount  offered 
is  limited  only  by  his  assurance  and  lung  power,  both  of  which  are  phenomenal,  avdyet 
it  is  these  limitless  offers  of  fictions  which  have  cost  neither  money  nor  effort — and  not  what 
the  farmer  has  produced  at  the  cost  of  such  infinite  care  and  labor — which  determines 
the  price  which  the  farmer  shall  receive  for  the  products  of  his  land  and  toil.  Thus  does 
the  market  wrecker  reap  where  he  has  not  sown.  Thus  does  this  worthless  drone  despoil 
the  industrious  farmer  of  a  just  reward  for  his  labor. 

How  mucli  longer  shall  the  farmer's  products,  grown  at  an  enormous  expenditure 
of  capital  and  labor,  be  forced  to  compete  with  the  limitless  and  costless  products  of  the 
lungs  of  the  short-seller? 

Is  there  another  business  that  is  subjected  to  such  unfair  and  immoral  competition? 

Would  other  than  farmers  submit  to  such  gross  injustice  when  they  have  the 
power  to  control  legislation  and  could,  by  the  enactment  of  laws  taxing  the  "Board-of- 
Trade-Gambler"  out  of  existence,  secure  the  reward  due  for  their  labors  and  yet  fail  to  do 
so  while  their  products  are  forced  to  compete  with  the  imaginary  products  of  a  horde  of 
parasites  and  harpies? 

Are  not  the  harpies  of  the  "Board  of  Trade"  as  much  worse  than  the  managers  of  a 
''bunco  or  skin  game"  as  the  stealing  of  hundreds  of  millions  a  year  from  those  who  take 
no  pari  in  the  game  is  worse  than  the  taking  a  few  dollars  from  some  fellow  who  volun- 
tarily goes  into  a  skin  game  thinking  he  has  a  sure  thing  of  turning  up  the  right  card 
and  thus  beating  the  dealer?  In  the  market-wrecking  game  the  farmer  is  not  even  given 
a  chance,  by  the  three-card  sharps  of  the  Board-of- Trade,  to  see  the  cards  that  rob  him  of 
the  reward  for  his  labor. 

For  years  the  market-wreckers  have  been  able,  by  the  short-selling  device,  to  de- 
prive the  farmer  of  a  due  reward  and  notwithstanding  the  deficient — world's— acreage 
they  will  remain  a  grave  menace  to  his  prosperity,  and  that  of  the  country,  so  long  as 
permitted  to  pursue  their  nefarious  calling  cif  .■■elling  the  crops  before  they  are  grown;  of 
selling  the  property  of  the  farmer,  without  his  consent,  and  thereby  fixing  a  price  for 
property  in  which  they  have  no  legitimate  interest. 

Although  existing  abnormal  conditions  may  enable  the  farmer — despite  the  baleful 
work  of  the  short-seller— to  get  more  than  usual  for  tliis  yeai'sciop  of  grain,  even  if  much 
less  than  what  they  should  receive,  yet  the  wreckers  have  taken  and  are  likely  to  retain 
complete  control  of  the  cotton  market  until  they  have  forced  the  cotton  grower  to  the 


THF,  MARKET  WRECKER  PREVENTS  ADVANCE  IN  VALUES.  67 

condition  in  which  they  liad  placed  the  }j:rain  grower  until  sliort  crops  enabled  the  niar- 
kel  to  get  partially  from  under  their  conlrol,  but  let  there  be  but  the  promise  of  fair  I'lain 
crops  next  summer  and  the  wrecl<er  will  resume  entire  control  of  the  markets  and  pi  ices 
be  again  hammered  down  to  an  unreinuneralive  level  and  tlie  process  of  depressing  prices 
below  a  natural  level  continue  until  the  marlct-wrecker  sludl  have  been  taxed  out 
of  existence. 


SOME    PHASES    OF    SHORT    SELLING. 

The  short-seller  produces  nothing;  he  performs  no  service,  and  is  but  a  destroyer  of 
the  value  of  other  men's  property. 

The  legitimate  trader,  be  he  a  buyer  either  for  immediate  consumption  or  to  hold 
for  an  advance,  takes  the  product  ofl'Ihe  market  thereby  steadying  demand  and  enabling 
the  producer  to  secure  a  fair  price  for  his  property. 

The  short-seller  needs  little  or  no  capital  to  enable  him  to  wreck  values  as  is  made 
clear  by  the  failures  of  Dunham  &  Co.  and  Pardridge.  Dunham,  with  a  capital  of  but 
$-•5,000,  was  carrying  a  line  of  shorts  aggregating  10.000,000  bushels;  equal  to  but  two  and  a 
half  cents  per  bushel,  and  this  fiat  grain,  represent ingsnch  an  insignificant  sum  in  forfeits 
put  up  to  assure  the  other  gambler  that  Dunham  would  not  go  back  on  the  game,  came 
in  direct  competition  with  and  depressed  the  price  (just  as  effectually  as  though  it  were 
real  grain)  of  that  grown  by  the  farmer  at  the  cost  of  much  expenditure  of  capital  and 
iutiuite  labor.     Could  anything  be  more  unfair? 

When,  by  the  sudden  advance  of  wheat  in  August,  the  great  bear  (Pardridge)  wag 
forced  into  liquidation  at  a  reported  loss  of  11.000,000,  he  must  have  had  out  a  short  line 
of  at  least  20.000,000  bushels,  as  the  advance  was  but  5  cents,  and  as  he  had  been  repeat- 
edly called  for  margins  during  the  advance,  it  would  appear  that  the  actual  investment  in 
these  enormous  short  sales — equal  to  nearly  one-twentieth  of  an  average  crop — could  not 
have  exceeded  two  cents  a  bushel  and  yet  this  man  has,  repeatedly,  with  such  relatively 
infinile.simal  investments,  been  able  to  depress  the  price  of  all  the  grain  owned  by  mill- 
ions of  farmers  and  deprive  them  of  the  reward  due  for  their  labors. 

In  a  published  interview  he  is  reported  to  have  said  that:  "Had  not  my  money 
given  out  I  could  and  would  have  sent  the  price  of  wheat  to  75  cents;  what  I  lost  was  only 
velvet  (prolils)  from  my  operations  since  April." 

In  the  four  mouths  requiied  to  secure  profits  reported  to  be  $1,000,000,  what  were 
the  losses  of  American  farmers  consequent  upon  the  operations  of  these  short-selling 
gamblers  ? 

Can  there  be  a  reasonable  doubt  that  in  consequei.ci;  of  short-selling  the  producer 
is  forced  to  accept  from  ten  to  twenty-tive  per  cent,  less  for  his  cotton  snd  grain  than  he 
ought  to  and  otherwise  would  receive? 

If  Board  of  Trade  meu  must  gamble  why  not  bet  on  a  game  of  poker  or  faro,  or 
upon  a  horse  race?  In  such  case  only  the  participants,  or  possibly  their  employers  from 
whom  has  been  stolen  the  money  wagered,  would  suffer  injury. 

Short-selling  enables  the  European  to  throw  immense  quantities  of  fictitious  prod- 
ucts upon  our  markets  thereby  depressing  the  price  when  he  tates  in  the  cash  product 
at  the  price  he  has  established  by  such  nefarious  practices.  Moreovf  r,  when  he  ha.") 
bought  a  cargo  of  Indian  or  Russian  wheal  he  sells  an  equal  quantity  short  in  our  mar- 
ket, and  thus  forces  the  American  farmer,  by  the  short-selling  device,  to  become  hia 
insurer  and,  this  loo,  without  paying  him  a  cent  of  premium.  By  the  short-selling 
device  the  American  farmer  is  made  to  assume  all  (he  risks  atlendant  upon  European 
importation  of  wheat  bought  from  his  competitors  in  India  and  llussia. 


68  SOME  PHASES  OF   SHORT  SELLING. 

By  selling  the  growing  crop  short  the  market  wrecker  is  continually  proclaiming 
that  it  will  be  so  great  as  to  swamp  llie  markets  of  the  world,  and  by  persistently  pursu- 
ing this  course  he  is  often  able  to  make  both  producer  and  consumer  believe  that  such  is 
the  case. 

Prices  are  never  as  low  as  the  market-wrecl^er  says  they  should  be,  and  the  lower 
they  get,  with  profits  in  h::ud,  the  harder  th<-y  pound  them  with  limitless  otters. 

In  selling  short  a  product  which  ha:8  cost  neither  money  nor  effort,  the  market- 
wrecker  requires  liL*le  besides  audacity,  lung  power  and  an  imagination  which  can  evoke 
enormous  crops  and  commercial  disaster  at  will.  Such  is  his  entire  capital  and  stock  in 
trade,  and  yet  so  enormous  is  the  volume  of  these  transactions  in  fictions  that  immense 
sums — in  the  aggregate— are  constantly  tied  up  in  margins;  sums  probably  several  times 
as  great  as  would  be  required  to  handle  all  the  actual  grain  seeking  a  market,  and  in  this 
way  is  a  needless  tax  levied  upon  the  industries  of  the  country  and  a  fictitious  scarcity  of 
money  brought  about,  such  scarcity  tending,  at  all  times,  to  still  further  depress  prices 
for  real  products. 

The  reductions  iu  the  price  of  products  which  the  operations  of  the  market-wrecker 
eflfect  are  doubtless  such  as  to  absorb  a  very  large  proportion  of  the  ordinary  profits  of 
production  thus  greatly  lessening  the  purchasing  power  of  the  farmer  and  this,  by  reae-    . 
tion,  directly  affects  the   prosperity  of  all  employed   in  distribution,  or  other  forms  of 
production,  hence  the  entire  community  suffers  from  the  evil  of  short-selling. 

When  wheat  is  selling  at  $1  the  short-seller  goes  upon  the  market  and  offers  it  for 
delivery  one  to  six  months  in  the  future  for  95  cents,  and  can  only  secure  a  profit  by 
breaking  tlie  price,  and  iu  order  to  do  this  resorts  to  the  fabrication  of  such  falsehoods  as 
his  experience  leads  him  to  believe  will  effect  the  end  desired.  He  relies  upon  such  fab- 
rications, not  the  offering  of  actual  products,  to  reduce  the  price  to  a  level  that  will  permit 
his  winniug  the  wager. 

Frequently  the  big  bears  cry  the  market  down  by  persistent  offerings  of  immense 
quantities  while  their  brokers,  upon  the  other  side  of  the  pit,  are  taking  all  that  them- 
selves and  other  parties  offer,  so  that  even  should  the  market  happen  to  advance  they 
cannot  lose  while  they  are  thus  enabled  to  cover  outstanding  short  sales  at  a  profit  on  that 
bought  from  others  at  the  price  they  have  established  by  their  "wash  sales,"  as  is  shown 
in  the  following  telegrams  from  a  broker  to  his  principal  at  Kansas  City: 

"Chicago,  June  4th,  1891.— J.  S.  &  Co.,  Kansas  City:  Ribs  ninety,  lard  twenty- 
five,  pork  fifty,  easy.     Bears  hammering  but  buying  through  brokers.  Roberts." 

From  and  to  same  parties  on  the  same  day: 

"MarUet  steady  now;  bears  doing  everything  to  break  market;  weakness  of  corn 
helping  them.  Robkrts." 

Destroy  the  profits  of  short-selling  by  placing  a  suflficient  tax  upon  every  such 
transaction  and  every  incentive  to  force  a  decline  would  disappear,  and  when  such 
incentive  disappears  prices  will  be  aftected  only  by  the  volume  of  real  products  offer- 
ing, and  supply  and  demand  will  once  more  determine  iu  which  direction  values  shall 
move,  and  every  dealer  being  an  owner  will  have  a  direct  interest  in  sustaining  prices, 
whereas  the  great  majority  of  the  so-called  dealers  are  now  interested  iu  depressing  prices, 
as  their  entire  profits  are  derived  from  short-selling. 

All  Board  of  Trade  speculators  derive  tneir  support  from  the  unjust  tolls  which 
short-selling  enables  them  to  levy  upon  the  farmer  and  as  they  are,  like  other  ganiblers, 
reckless  spendthrifts  and  most  extravagant  livers  and  number,  with  their  alljliated 
hordes,  at  least  20,000;  and  assuming  that  tliolr  annual  expenditures  are  no  more  than 
$5,000  each,  it  follows  that  these  worse  than  u.selcss  parasites  yearly  mulct  the  farmers  of 
the  country  in  the  sum  of  iflOO, 000. 000.  What  is  worse  than  this  they  act  as  a  magnet 
that  draws  many  of  the  brightest  youths  into  this  whirlpool,  and  most  of  the  embezzle- 
ments of  bank  presidents,  casliiers,  clerls  and  tellers,  as  well  as  tho:-e  of  the  empli>yes  of 
commercial  houses,  are  due  and  directly  traceable  to  the  craze  for  speculative  gambling 
that  has  its  birthplace  and  habitat  upou  the  Board  of  Trade. 

Add  but  ten  per  cent,  to  the  value  of  the  products  of  the  farm  by  destroying  short- 
selling  and  the  farmer  would  not  only  be  able  to  pay  his  debts,  but  those  of  the  Nation, 
State  and  Municipality. 


SOME    PHASES    OF    SHORT    SELLING.  69 

Was  it  impossible  to  wreck  values  by  sliort-sellinj?  prices  would  be  far  more  steady 
and  monied  men  would  be  willing  to  l)uy  actual  products  for  investment,  but  now  so  fre- 
i|uent,  erratic  and  rapid  are  the  lluctuatioiis  in  values,  consequent  upon  the  continual 
ell'ort  of  the  short-seller  to  put  down  prices,  that  the  merchant  is  deterred  from  investing 
in  property  tlie  price  of  which  is  determined  by  such  abnormal  metlKids. 

It  has  lona;  been  axiomatic  that  property  that  is  hawked  from  one  to  another  in 
search  of  a  buyer  becomes  stale  and  pracliially  unsalable  at  anything  near  its  real  value, 
anil  this  is  just  what  tlie  short-seller  and  non-owner  is  constantly  doing  with  property  of 
\\\r  (:ivnier  wif/iout  the  owner's  consent  and  against  his  most  earnest  protest.  The  result 
is  that  wliich  always  follows  when  property  is  tlius  hawked  about  in  search  of  a  buyer. 
There  is  but  one  remedy  possible,  and  that  is  for  Congre.ss  to  exercise  the  taxing  power 
for  the  protection  of  the  live  millions  of  cotton  and  grain  growers  and  tax  the  20,000  mar- 
ket-wrecking short-selling  gamblers  of  the  Boards  of  Trade  out  of  existence,  and  thus 
relieve  production  of  an  intolerable  burthen. 

The  market  wrecker  has  erected  a  toll  bridge  on  the  highway  of  conmierce  where 
there  is  no  stream  to  cross. 

Should  not  farmers,  in  and  out  of  season,  write  and  talk  to  their  senators  and  rep- 
reaentatives  in  Congress  persistently  until  the  Butterworth  bill,  or  even  a  more  effective 
measure,  becomes  a  law? 

Why  should  not  the  farmer  make  life  a  burthen  to  the  law  maker  until  he  grants 
the  required  protection  to  the  greatest  industry  of  the  nation  ? 

Shall  all  other  interests  be  "protected"  and  only  the  farmer  be  left  without  the 
sadly  needed  protection  while  he  alone  is  taxed  for  the  benefit  of  the  '  protected  classes?" 


OPINIONS,  PROFESSIONAL  AND  OTHER,  OF   MARKET  WRECKING. 

The  great  short-seller  (Pardridge)  is  reported  to  have  said  to  the  reporter  of  a  Chi- 
cago paper  that  had  his  money  not  have  run  short — he  was  unable  to  create  fiat  money 
as  readily  as  he  could  flat  grain— he  could  and  would  have  forced  the  price  of  wheat  to  75 
cents,  and  one  of  his  brokers  said  that  if  wheat  was  selling  at  .5  cents  per  bushel  he  would 
be  unhappy  if  he  could  not  force  it  to  four  and  a  half. 

Leopold  Bloom,  who  made  a  million  or  more  by  gambling  on  the  Board  and  ia 
reported  to  have  lost  $35,000  in  a  "brace"  game  of  faro  with  two  other  Board  of  Trade 
operators  (and  which  he  refused  to  pay),  hence  is  competent  to  express  an  opinion  of 
Board  of  Trade  as  well  as  other  varieties  of  gambling,  says  that: 

"It  is  too  much  of  a  strain  on  a  man.  One  is  under  pressure  all  the  time.  He  la 
betting  his  money  against  the  market.  If  he  buys  and  she  goes  up  he  wins,  but  if  she 
goes  down  he  is  a  loser.  Its  aplain  game  of  gamble,  but  it's  legal  and  laro  isn't.  If  they 
would  tak".  the  limit  off  faro  it  would  he  a  better  game  than  wheat,  because  you  could  get 
quicker  action;  but  with  the  limit  on  tliere  isn't  money  enough  in  it.  A  fellow  who  is  play- 
ing agiiii;st  the  market  (against  legitimate  supply  and  demand)  takes  a  good  many 
chances,  and  now  that  I've  got  enough  to  keep  me  comfortably  I  want  to  rest." 

May  28th,  1891,  the  Board  of  Trade  firm  of  Keunett  &  Hopkins  is  reported  to  have 
said: 

"From  a  statistical  standpoint  the  position  of  wheat  has  not  been  strong-^r  for 
many  years,  but  the  huge  offerings  by  the  bears  breaks  down  the  price  in  the  face  of  the 
strongest  conditions.  This  may  go  on  for  weeks  notwithstanding  the  grain  moves  east- 
ward in  a  great  flood  and  is  exported  as  soon  as  it  reaches  tide  water." 

Observed  Robert  Li ud bloom: 

"It  is  hard  to  buck  against  the  millions  of  wind  wheat  that  we  have  to  contend 
with  in  the  wheat  pit.    The  bears  are  determined  that  the  legitimate  news  shall  produce 


70  OPINIONS   OF   MARKET    WRECKING. 

n  )  eflect.  We  point  to  the  large  clearances;  tbey  say  bah  !  that  is  mostly  flour;  we  note 
thi  large  sales  of  wheat  at  St.  Louis  for  export,  and  they  cry,  O!  th:it  is  only  Oregon 
wheat:  we  hear  of  the  cleaiance  of  700,000  bushels  during  tlie  last  two  days  fmni  the  prin- 
cipal Atlantic  ports  aud  t  ley  go  into  the  pit  and  s-eil  20.000,000  liusliel.s  of  wii.d;  mean- 
while a  great  deal  of  money  is  made  through  these  deals,  and  the  quistiou  aritos  if  it  is 
not  the  farmer  who  contributes  it?" 

Under  the  date  of  May  13th,  1891,  a  great  B^ard  of  Trade  house  writes: 

"There  has  been  tremendous  selling  of  wheat  lately  upon  .luiie  acenery.     June  is 
still  weeks  off  but  the  scenery  is  here  all  the  same,  and  the  almanac  players  ;ire  discount- 
ing their  theory  by  taking  an  early  start.     The  mob  is  now  jumping  on  wheat  and  i  v,'r 
lastingly  whooping  it  up  on  that  side.     It  has  again  become  a  sure  thing  to  sell  wluat 
short." 

When  speaking  of  the  efTorts  of  the  Chicago  Board  of  Trade  to  suppress  the 
bucket  shops,  Mr.  C.  A.  Pillshury,  the  great  Minneapolis  miller,  is  reported  as  saying: 

'A  step  which  would  cure  the  whole  trouble  would  be  to  stop  the  selling  of  gr.iin 
for  future  delivery  except  by  parties  who  absolutely  own  or  control  the  product,  and 
would  be  able  to  deliver  it  if  called  upon.  I  believe  this  will  be  done  within  a  few  years, 
even  if  the  constitution  of  the  United  States  has  to  be  amended  in  order  to  do  it. 

"It  is  a  perfect  mystery  to  me  that  the  Farmers'  Alliances  are  paying  attention  to 
minor  evils  and  overlooking  this  vampire  which  is  susking  their  very  life  blood. 

"The  legitimate  situation  has  been  such  during  the  last  three  or  four  years  that 
wheat  should  have  sold  at  one  dollar  per  bushel  at  any  railroad  station  in  Minnesota. 
This  tremendous  short-selling  of  hundreds  of  millions  of  bushels,  which  the  jjurty  selling 
does  not  own  nor  ever  expect  to  own,  has  knocked  the  bottom  out  of  the  market,  as  these 
wind  offerings  and  sales  have  just  as  much  effect  upon  the  market  as  genuine  transac- 
tions, and  the  big  bears  have  been  so  successful  and  made  such  enormous  profits  from 
their  short  sales  that  they  now  have  an  immense  following,  and  the  evil  has  assumed  tre- 
mendous proportions. 

'Production  throughout  the  world,  as  a  whole,  has  not  increased  during  the  last 
five,  and  possibly  ten  years,  yet  if  this  short-selling  is  not  stopped  there  will  be  no 
advance  in  price,  despite  this  fact,  escept  in  case  of  grave  disaster  to  the  crops  over  wide 
areas. 

"The  Chicago  Board  of  Trade  is  now  moving  in  the  right  direction,  but  after  closing 
the  bucket  shops  let  them  close  the  gambling  on  their  own  Board  and  confine  their  busi- 
ness to  legitimate  transactions.  When  this  is  done  the  whole  western  country  would  see 
such  prosperity  as  has  not  been  known  for  many  years.  The  legitimate  conditions  are  alj 
right  for  it,  but  the  illegitimate  conditions  could  not  be  worse." 

Mr.  Hugh  McLennan,  one  of  the  earliest  traders  in  grain  in  Chicago,  writes: 

"The  baker  and  miller  in  Europe  who  in  former  days  had  to  consider  supplies  for 
coming  months,  is  now  quieted  with  his  daily  cable  from  Chicago  that  May  wheat  is  off 
one  cent.  Wheat  in  Chicago  is  now  selling  five  cents  below  the  average  price  for  last 
October,  while  the  price  in  Liverpool  is  about  the  same  as  then.  The  English  markets 
have  held  up  in  spite  of  the  depressing  influences  exerted  from  this  side  of  the  Atlantic." 

"Commission  Merchant,"  in  a  a  communication  to  the  Chicago  TVihune,  writes: 

"Every  one  engaged  in  the  actual  handling  of  grain  is  asking  the  cause  of  the  low 
prices,  and  many  are  beginning  to  recognize  the  fact  that  the  practice  of  short-selling  has 
much  to  do  with  it,  and  especially  the  recent  custom  of  selling  immense  lines  of  (short) 
grain  for  delivery  five  or  six  months  from  the  date  of  sale." 

In  the  Tribune  market  report  for  January  1.3tli,  it  is  said  that: 

"With  every  encouragement  for  an  advance  in  prices  and  a  bullish  interpretation 
of  the  government  report  to  aid  them,  the  local  produce  maikets,  after  a  brief  flurry  at  the 
opening,  declined  materially  and  closed  at  the  lowest  point  of  the  day.  The  depression 
was  due  to  the  raiding  of  the  heavy  shorts,  who  knew  their  only  salvation  lay  in  a  suc- 
cessful raid." 

In  characterizing  the  stock  gamblers  of  Wall  street,  the  Chicago  Tribune  used  the 
following  language,  only  it  is  here  paraphrased  and  applied  to  the  Board  of  Trade  market 
wreckers,  to  whom  it  is  even  more  clearly  applicable  than  to  those  of  the  Stock  Exchange: 

"The  scum  of  the  United  States  is  gathered  upon  the  Boards  of  Trade  to  speculate 
in  the  necessaries  of  life.  There  is  no  honesty  in  the  business.  Part  of  it  is  the  outwork- 
ing of  cool  calculation  to  rob  by  hoodwinking  the  public,  inducing  men  to  sell  when  they 
ought  to  buy  if  they  did  anything.  The  rest  is  blind  chance,  a  simi)le  betting  on  the 
course  of  prices,  and  a  great  deal  of  it  is  nothing  but  the  buying  and  sellinffof  "privi- 
leges" which  entitles  the  one  party  to  call  for  or  deliver  a  quantity  of  the  stuff  pretended 
to  be  dealt  in  at  a  named  i)rice  if  he  chooses  to  do  so  within  some  specified  time. 

"But  for  the  operation  of  the  gamblers  lluse  alle^'ed  products  would  not  be  dealt  in. 
What  possible  difference  can  it  make  to  the  welfare  of  the  country  whether  the  gamblers 


OPINIONS  OF   MARKET  WRECKING.  71 

continue  to  exist  or  nut?     If  tliey  were  nil  to  be  olcaned  out  (a  la  Pardridgo)  the  people 

would  not  only  be  no  worse  oH'.  but  aetunlly  vastly  better." 

The  St.  Louis  Republic  of  August  20lh,  1891,  says  editorially: 

''When  11,000,000  bushels  of  wheat  are  sold  in  one  day  on  one  Merchants'  E.^cchange, 

how  long  will  it  take  to  handle  the  whole  crop?    And   that  licins  first  found,  how  long 

will  it  take  to  handle  a  poker  deck  so  as  to  regulate  the  wheat  supply  and  estnhlhhiU pricet 

Aside  from  the  disastrous  effects  of  these  gambling  practices  upon  the  producer, 
who  is  an  innocent  and  involuntary  victim,  they  arc  equally  disastrous  to  the  gambler 
whom  they  rob  of  all  right  feeling. 

Speaking  of  gambling  in  all  its  forms,  an  eminent  Knglish  authority  says: 

"Gambling  not  only  lends  to  financial  luin,  but  itproduces  Ihe  most  heartless  forms 
of  selfishness,  and  is  especially  fatal  to  delicacy  and  magnanimity  of  character.  It  is  a 
peculiarly  mean  and  sordid  vice." 

Herbert  Spencer,  iu  his  Study  of  Sociology,  presents  two  aspects  of  the  immorality 
of  gambling  when  he  says: 

"It  is  gain  without  merit;  and  secondly,  it  is  gain  through  another's  loss.  When- 
ever the  seller  and  the  buyer  are  not  mutually  benelitted  the  transaction  is  immoral  and 
rotten  and  involves  dishonesty  and  deceit  on  one  side  or  the  other." 

Some  of  the  moral  aspects  of  gambling  m  farm  products,  and  the  incalculable 
wrong  it  works  the  producer,  is  well  set  forth  in  a  recent  issue  of  the  (Iowa)  Homestead. 
Says  the  Homestead: 

"For  owners  of  wheat  to  sell  when  at  any  given  period  they  think  the  market  price 
is  as  good  as  it  is  going  to  be  is  one  thing;  for  men  who  own  no  wheat,  and  mean  to  own 
none,  to  sell  for  future  delivery,  is  another  and  very  diflereut  thing.  It  is  neither  more 
nor  less,  in  substance,  than  a  bet  as  to  what  the  price  will  be  at  the  date  when,  nominally, 
the  delivery  is  to  be  made.  It  is  'backing  the  judgment'  just  as  much  as  though  a  stake 
were  set  on  the  turn  of  a  card.  «  *  »  *  This  backing  of  judgment,  however, 
is  the  simplest  and  least  harmful  form  of  grain  gambling.  The  transactions  of  profes- 
sional grain  gamblers  compare  with  this  form  about  as  a  sold  race,  a  brace  game  of  faro 
or  Sir  William  Gordon-Cummings'  dealings  in  baccarat  compare  with  square  games, 
where  risks  are  honestly  taken  and  chance  or  legitimate  skill  is  permitted  to  determine 
them.  The  professionals,  when  a  deal  is  decided  upon,  jump  upon  the  market  and  sell 
millions  of  bushels  when  they  don't  own  a  kernel;  they  follow  the  price  down  with 
lower  and  still  lower  sales,  using  all  kinds  of  false  rumors — as  to  crops,  failures  of  bankers, 
and  other  conditions  affecting  products  and  mone.y — as  clubs  to  beat  down  prices,  and  at 
length,  when  prices  have  reached  the  lowest  possible  notch,  they  turn  iu  and  'cover 
their  shorts'  at  the  low  figure,  reaping  as  stakes  the  difference  between  the  higher  figures 
at  which  they  have  sold  and  the  lower  ones  at  which  they  have  covered  their  'short' 
sales.  The  means  employed  to  produce  the  depression,  in  point  of  honesty,  is  not  a  whit 
superior  to  the  cheating  tricks  of  the  professional  card  sharp. 

"But  this  falls  far  short  of  a  full  statement  of  the  moral  evil  involved  in  grain 
gambling.  When  a  hundred  excited  men  jumpintoa  Chicago  grain  pit  and  play  a  game, 
the  result  of  which,  when  telegraphed  over  the  country,  reduces  the  value  of  the  contents  of 
ever  1/  producer's  bin  five  to  ten  cents  a  bushel,  the  tendency  of  it  all  is  to  confuse  the  ideas 
of  right  and  wrong  of  every  man  upon  whom  loss  has  thus  been  inflicted. 

"As  an  abstract  proposition,  every  man  will  admit  that  demand  and  supply  should 
regulate  price;  yet  the  producers  of  the  country  have  become  so  habituated  to  seeing  the 
law  of  demand  and  supply  nullified  to  their  injury  by  gambling  manipulations  that  a 
very  large  proportion  of  them  would  not  hesitate  to  combine  in  the  creation  of  an  artifi- 
cial scarcity  if  they  saw  their  way  clear  to  the  accomplishment  of  such  a  result.  If  there 
had  never  have  been  any  cotton  gambling  there  would  never  have  been  a  sub-treasury 
scheme,  if  there  were  no  grain  gambling  there  would  have  been  no  attempt  at  a  'farmers' 
wheat  corner.' 

"Gambling  in  farm  products  has  caused  such  wide-spread  injury  to  persons  not  in 
any  manner  engaged  in  it,  that  it  is  in  large  measure  responsible  for  some  confusion  of 
ideas  as  to  the  proposition  to  fight  the  devil  with  fire. 

"The  entire  civilized  world  has  lately  been  convulsed  over  the  spectacle  of  a  royal 
came  of  baccarat  at  which  there  was  said  to  have  been  some  cheating,  yet  the  evil  of  it 
was  confined  to  the  persons  engaged  in  the  game.  Possibly  there  are  states  in  the  Union 
which  do  not  make  gambling  a  punishable  offense;  yet  here  again,  the  evil  extends  no 
farther  than  to  those  who  participate  it  it,  or  at  most  to  their  families.  A  number  of 
states  have  quite  recently  passed  laws  against  pool  selling;  a  species  of  gambling  that  ia 
had  enough  to  merit  )irohibitiou,  and  yet  infinitesimnlly  trifling  when  compared  with 
the  millions  that  an^  lost  and  won  in  grain  (and  cotton)  gambling.  Why  should  the  law 
punish  those  who  play  faro  and  wink  at  'futures?'  Why  forbid  poker  and  permit  'jiuts 
and  calls?'     The  former  injures  in  purse  and  in  morals  perhaps,  only  the  persons  engaged 


72  OPIi<IONS  OF    MARKET    WRECKING. 

iu  it;  the  latter  does  as  much,  and  besides  injures  the  farmer  morally  and  materially 
although  he  be  a  thousand  miles  away;  materially,  for  it  makes  him  pay  heavy  losses  on 
a  game  in  which  he  does  not  participate;  morally,  for  it  tends  to  undermine  his  patriotic 
regard  for  a  government  that  permits  such  injury  to  be  inflicted  u\>iiu  him,  and  drives 
him  to  adopt  questionable  methods  of  self  protection. 

"Organized  society  has  neithersoul  or  future;  it  must  take  its  punishment  asitgoes 
along.  The  sin  of  omission  which  permits  a  gigantic  scheme  of  gambling  under  pretense 
of  commerce,  involving  in  its  evil  effects  the  innocent  with  the  guilty,  will  not  escape 
retribution. 

"Congress  recently  adopted  measures  designed  to  prevent,  to  the  extent  of  con- 
gressional authority,  the  business  of  the  Louisiana  lottery  and  the  moral  sense  of  the 
entire  community  sustained  it  in  the  act. 

"Lotteries  are  wrong  and  demoralizing,  and  yrt  they  injure  only  those  who  volun- 
tarily become  their  victims.  Board  of  Trade  gambling,  on  the  contrary,  while  equally 
wrong  and  demoralizing  to  the  participants  does  immense  injury  to  vast  numbers  of  peo- 
ple who  have  nothing  whatever  to  do  with  it.  As  long  as  this  form  of  ganililincr  — which 
is  as  bad  morally  as  the  worst — is  permitted  we  can  Imrdly  escape  the  convicliiju  of  hav- 
ing strained  at  the  lottery  gnat  and  swallowed  the  Board  of  Trade  camel.  Can  the  nation 
aflTord  further  responsibility  for  a  monster  gambling  scheme  which  inflicts  great  loss 
upon  so  large  a  number  of  its  most  ind,ustrious  and  worthy  citizens,  even  when  they  take 
no  voluntary  part  in  the  game?  Is  it  not  the  duty  of  the  nation  to  protect  its  citizens 
from  injuries  against  which  no  prudence  or  foresight  on  their  part  can  shield  them?  Can 
it  hope  for  the  patriotic  affection  of  those  whom  it  does  not  protect  ?  Is  it  not  high  time 
that  the  moral  sense  of  the  country  was  aroused  on  this  subject?  This  nation  can  not 
afford  to  ignore  the  existence  of  a  moral  cancer  so  gigantic,  knowing  it  to  be  a  moral  can- 
cer. That  it  does  know  the  immorality  of  gambling  is  proven  by  the  manner  in  which 
it  treats  oiher  forms  of  the  evil  that  are  far  less  harmful. 

"Nor  should  the  high  social  position,  wealth  or  church  connection  of  its  votaries 
deter  us  from  laying  bare  this  iniquity,  or  the  cry  of  paiu  that  comes  from  the  brown 
stone  fronts  stay  the  hand  that  holds  the  knife  that  is  to  rid  the  nation  of  this  festering 
ulcer." 


-■<••►- 


THE   VALUE   OF    A    TR.\DE   JOURNAL'S   DATA. 

L mg  before  the  writer  began  the  systematic  investigation  of  the  world's  food  sup- 
ply he  had  become  convinced  that  much  of  the  so-called  data,  as  to  production  and  con- 
sumption, floating  through  the  columns  of  the  daily  papers  was  either  manufactured  for 
a  purpose  or  was  of  a  fugitive  character;  originating  ii"  one  knew  where;  without  parent- 
age; utterly  valueless  and  misleading;  but  while  somewhat  distrustful  of  some  of  the 
tabular  statements  of  the  special  trade  journals — distrustful  because  of  a  lack  of  even  ap- 
parent accord  emanatingfrom  the  same  and  variant  sources — yet  it  was  supposed  thatthe 
conductors  of  reputable  journals  at  least  would  exercise  due  care  and  diligence  in  procuring 
and  tabulating  reliable  data,  and  in  every  case  where  official  data  was  obtainable  such 
alone  would  be  used  and  every  precaution  taken  to  verify  even  official  statements  of  which 
quantities  and  values  formed  a  constituent  part. 

When  a  journal  sets  itself  up  as  an  instructor  of  the  public  and  a  purveyor  of  in- 
formation, simple  justice  and  honesty  render  it  obligatory  upon  its  conductors  that  they 
exercise  the  utmost  care  to  not  only  secure  all  and  the  latest  available  data  and  informa- 
tion, but  that  it  shall  be  of  the  highest  possible  character,  and  a  journal  failing  to  do  this 
writes  itself  down  a  pretender  and  charlatan,  securing  attention  and  the  money  of  its 
patrons  by  false  and  fraudulent  ])retenses.  Such  a  journal  is  clearly  entitled  to  neither 
confidence  nor  consideration  at  the  hands  of  the  people  it  has  deceived  and  defrauded. 

Busy  men  are  unable  to  make  original  investigations,  and  rely  upon  specialists  to 
do  it  and  make  publication  in  tiade  journals,  and  readily  pay  for  such  services— and  the 
writer,  like  other  busy  men  had,  from  its  reinilatiou,  been  led  to  accept  the  statements  of 


THE   VALUE  OF   A.  TRADE  JOURNAL'S  DATA.  73 

the  Cincinnati  Price  Current  as  reliable  and  trustworthy,  although  even  in  a  hasty  read- 
ing of  that  journal  he  discovered  a  lack  of  that  complete  accord  with  (its)  prior  utterances 
which  should  characterize  the  statements  of  every  publication  assuniin*;  so  important  a 
duty  as  that  of  furnishing  producers,  consumers,  merchants,  transpoilers  and  the  gen- 
eral public  with  information  and  numerical  data  in  relation  to  so  vital  a  subject  as  that 
pertaining  to  the  world's  food  supply  and  yet,  such  was  tlio  staudiug  of  the  Price  Cur- 
rent that  the  writi'r  long  deemed  it  but  little  short  of  heresy  to  ijuc-^tion  any  of  its  state- 
ments, be  they  tabular  or  other,  but  being  iin|)elled,  by  tlieunprofitableriess  of  his  farming 
o)ierations,  to  undertaUe  an  investigation  of  the  present  (and  prospective)  productive 
power  of  the  tields  of  tlie  temperate  zones  supplying  the  food  of  the  bread  eating  world 
he  soon  found  that  neither  the  current  statements  or  the  tabuhited  data  of  I  lie  Price  Cur- 
rent accorded  witli  its  previous  utterances  or  with  available  official  reports,  many  of  its 
divergencies  being  so  far  out  of  Hue  as  to  seem  intentional,  and  it  appeared  to  be  in  the 
habit  of  publishing  any  set  of  figures  that  would  conform  to  the  argument  it  desired  to 
make.  Careful  reading  of  the  Price  Ctirrrnt  brought  the  conviction  home  to  the  writer 
that  a  theory  was  first  espou.sed  and  then  figures  adopted— if  not  manufactured— that 
would  sustain  the  theory. 

To  make  it  clear  that  little  or  no  reliance  can  be  placed  upon  tlie  statemeuts  and 
data  published  by  tlie  Price  Current,  a  small  part  of  the  errors  crowding  its  pages  during 
recent  weeks  are  instanced: 

In  its  issue  of  July  0th  the  Price  Current  places  the  production  of  wlieat  in  France 
in  1890  at  325,000,000  bushels  and  states  the  largest  French  crop  during  the  past  seven 
years  to  have  been  325,000,000  and  the  smallest  to  have  been  273,000,000  bushels,  when  it 
Is  ofBcially  stated,  in  the  bulletins  of  the  French  Ministry  of  Agriculture  for  the  years 
1S87,  1888  and  1889,  and  by  the  United  States  Dep.irtmeut  of  Agriculture  for  18S-1.  188-5, 
1886  and  1890,  that  the  seven  crops  have  given  the  following  quantities: 

1884 .^24,130,000  bushels  I  188S 280,177,000  busliels 

1885 312,912,000      "  |  1889 307.357,000      " 

1886 304,427,000      "  11890 338,902,000      " 

1886 319,094,000      "  | 

From  this  official  data,  all  of  which  was  available  in  publications  of  the  Depart- 
ment of  Agriculture  prior  to  the  Price  CurrerU's  issue  of  July  9tli,  we  find  that  the  largest 
French  crop  of  the  seven  years  was  13,902.000  bushels  greater  and  the  smallest  crop  of  the 
seiies  was  7,000,000  bushels  greater  than  stated  by  the  Price  Current. 

In  thesame  is^ue  it  states  that  the  Russian  crop  of  1890  was  197,000,000  bushels,  the 
largest  Russian  crop  of  the  seven  years  was  274,000,000  bushels  and  the  .smallest  178.000,- 
OOO,  while  the  official  figures  show  that  tlie  crop  of  1890 — exclusive  of  Poland — was  205  - 
972,000  bushels,  the  largest  crop  295,711,000  and  the  smallest  163,000,000  bushels,  or  a  dif. 
ference,  respectively,  of  8,972,000  bushels,  21,711.000  bushels  and  15,000,000. 

In  the  same  issue  it  tells  us  that  the  Italian  wheat  crop  of  1890  was  126  000,000 
bushels,  the  largest  crop  in  seven  years  129,000,000  bushels  and  the  smallest  one  103,000,- 
OOO  bushels.  While  this  statement  is  but  640,000  bushels  less  than  the  ofBcial  returns  as 
to  the  crop  of  1890,  Bulletin  No.  10  of  the  Italian  Ministry  of  Agriculture  shows  thiit 
the  largest  crop  during  the  seven  years,  other  than  that  of  1890,  was  that  of  1887,  which 
gave  the  out-turn  of  119,500,000  bushels,  or  9,500,000  bushels  less  than  the  Price  Current's 
largest  crop,  as  that  of  1890  was  2,360,000  bushels  less;  liut  the  most  singular  thing  about 
the  Price  Current's  statements  as  to  Italian  wheat  production  is  found  in  the  fact  that  in 
its  issue  of  July  23rd  it  places  the  average  yearly  production  of  wheat  in  Italy  at  135,000,- 
000  bushels,  being  6,000,000  bushels  more  than  it  states  the  greatest  crop  to  have  been.  la 
not  the  Price  Current  the  only  party  that  can  make  an  average  greater  than  the  greatest 
number  of  the  series  going  t<>  make  up  such  average? 

When  the  Price  Current  jniblished  these  astounding  figures  the  official  data  rela 
ting  to  Italian  crops,  had  long  l>een  available  in  the  publications  of  the  United  States 
Department  of  Agriculture.  And  this  so  readily  available  data,  and  no  doubt  in  the  p  ■- 
session  o'  the  Price  Current  in  the  reports  of  the  Department  for  April  and  June.  1891, 
shows  that  the  average  yield  of  the  wh^at  fields  of  Italy  during  the  last  seven  vears  to 
have  been  113,480,000  bushels  instead  of  the  135  000,000  stated  by  the  Price  Current. 


74 


THE  VALUE   OF   A   TRADE   JOURNAL'S   DATA. 


The  July  23d  Price  Current  places  the  average  production  of  wheat  in  Spain  at 
110,000,000  bushels  while  the  data  published  liy  the  Department  of  Agriculture,  and 
which  accords  with  that  collated  by  tlie  writer,  malies  the  Spanish  average  92  000,000 
bushels  for  the  decade  and  87,779,000  bushels  for  the  last  seven  years,  the  mean  being 
some  20.000,000  bushels  less  than  the  Price  Current's  figures. 

The  Price  Current  makes  the  largest  Spanish  crop  of  the  seven  years  131.000,000 
bushels  while  the  official  data  shows  it  to  Iiave  been  but  113,500,000  bushels — a  diflference 
of  16,500,000  bushels — a  mere  trifle  for  this  journal. 

So  carefully  is  the  Price  Current  edited  that  in  its  issue  of  July  23d  it  states  the 
average  wheat  crop  of  Hungary  to  be  125,000  000  bushels,  and  in  the  issue  of  July  9th  it 
states  the  greatest  Hungarian  crop  of  the  seven  years  to  have  been  165,000,000  bushels 
and  the  smallest  to  have  been  194,000,000.  Probably  the  Price  Current  is  the  flrst  to  make 
the  discovery  that  165  is  more  than  194,  as  it  is  probably  the  first  to  discover  that  a  crop 
of  92,700,000  bushels  can,  by  the  use  of  an  agile  pen,  lie  transposed  into  one  of  194,000,000. 

In  the  Price  Current  at  July  23d  the  annual  average  production  of  wheat  in  Hun- 
gary is  stated  to  be  40,000,000  bushels,  and  the  smallest  crop  in  the  last  seven  years  to 
have  been  37,000  000  bushels,  when  the  official  reports  show  the  average  for  the  decade  to 
have  been  43,670,000  bushels,  as  they  show  the  average  during  the  last  seven  years  to  have 
been  46,000,000,  while  the  smallest  crop  in  seven  is  otRcially  placed  at  38,376,000  bushels; 
but  then  a  matter  of  1,375,000  bushels  is  of  no  consequence,  especially  when  to  be  more 
exact  necessitates  reference  to  readily  available  official  publications. 

In  the  Price  Current's  issue  of  July  9th  the  smallest  crop  of  the  last  seven,  in  Ger- 
many, is  placed  at  82,000  000  bushels,  while  official  data  readily  available  when  such  pub- 
lication was  made,  shows  that  the  smallest  German  crop,  since  1SS3,  gave  an  out-turn  of " 
87,170,000,  a  difference  of  5,170,000  bushels. 

In  the  Price  Current  for  July  23d  it  is  in  one  place  stated  that  the  product  of  wheat 
in  India,  in  1891,  was  255,435,000  bushels,  while  lower  down  in  the  same  column  the  crop 
of  1890-91  is  placed  at  an  even  235,000,000,  the  difference  being  no  les-s  than  20,435,000.  It 
is,  however,  but  due  to  the  Price  Cm-rent  to  state  that  it  now  claims  that  the  235,000,000 
bushel  statement  relates  to  the  crop  harvested  in  1890,  but  such  is  not  the  reading  of  the 
statement  in  the  issue  of  July  23d,  and  that  such  claim  is  an  afterthought  is  made  highly 
probable  by  the  fact  that  in  its  issue  of  October  23d,  1890  it  stated  tlie  product  of  the 
Indian  harvest  for  that  year  at  225,000.000  bushels,  being  10,000,000  bushels  less  than  the 
out-turn  it  now  sets  up  the  claim  that  such  crop  gave.  Takin.s;  cue  horn  of  the  dilemma 
there  is  an  unexplained  discrepancy  in  i(s  statement  of  20,435,000  bushels,  while  pendant 
from  the  other  horn  hangs  a  trifle  of  10,000,000. 

More  than  this;  in  its  issue  of  July  23d  there  is  tabulated  the  product  of  seven  recent 
Indian  wheat  harvests,  but  the  quantities  of  but  two  accord,  even  remotely,  with  the  offi- 
cial figures  thrice  stated  in  (three  of)  the  monthly  reports  of  the  Department  of  Agri- 
culture. 

In  its  issue  of  the  27th  of  August,  the  Price  Current  places  the  annual  consumption  of 
wheat  and  rye  in  France  at  about  405,000,000  bushels,  while  official  data,  available  months, 
and  part  of  it  years,  before  such  publication  was  made,  shows  that  the  production  and  net 
importation  of  wheat  and  rye — including  a  mi.\ture  of  wheat  and  rye  known  as  maslin — 
from  1887  to  1889,  inclusive,  to  have  been  as  follows: 


Yeaks. 

Production, 
Bushels. 

Net  Iinporlaliun 
Bushels. 

Total  Supply, 
Bushels. 

1887-88 

400,801,000 
355,579,000 
385,920.000 

28,416,000 
47,70.S.000 
28,752,000 

429  217  OCO 

1888-89 

1889-90 

403,347.000 
414  1)70  000 

Totals 

1,142.300,000 

]04,9H6  000 

1  ■■'47  "34  000 

Averages 

380,766,000 

34.979  OHO 

415,745  000 

It  would  appear  that  the  Price  Curren/ understates  the  annual  consumption  of  wheat 
and  rye  in  France  no  less  than  10,745,000  bushels,  and  this  is  made  still  more  clear  upc  d 


THE  VALUE  OF  A   TRADE  JOURNAL'S  DATA.  75 


an  examiimtion  of  the  reports  of  the  U.  8.  Departmentof  Agriculture  for  December,  1883^ 
where  it  is  sliown  that  the  consumption  of  wiieat  aud  rye  (inoluclin;,'  mixtures  of  the  two 
grains)  for  bread,  .'■ted  iiud  use  in  tlie  arts  during  tlie  ten  years  followiiifj  the  I"'rani")-(}er- 
man  war — when  the  population  was  fully  a  million  less  than  now — averaged  40(i, 1)00,000 
bushels  per  year,  being  at  the  rale  of  10.97  bushels  per  capita,  while  during  the  years 
tabulated  above  the  per  capita  quota,  for  all  purposes,  has  been  10.92  bushels.  The  quan- 
tity consumed  is  found  to  be  a  very  constant  one. 

In  the  issue  of  the  Price  Current  now  under  review  it  is  stated  that  the  United  King- 
dom will,  during  this  cereal  year,  require  to  import  137,000,000  bushels  of  wheat,  while 
the  imports  of  the  last  four  years  are  oflicially  shown  to  have  averaged  more  than  151,- 
000,000  bushels,  and  the  British  grain  trade  journals  estimate  the  imports  at  from 
162,000,000  to  165,000,000  bushels. 

Moreover,  the  Price  Current  states  the  present  annual  consumption  of  Britain  at 
about  210,000,000  bushels,  when  the  production  aud  net  importation  of  wheat  alone,  during 
the  last  four  years  arc  found,  from  official  reports,  to  have  averaged  more  than  227,000,000 
bushels  (and  about  2.500,000  bushels  of  rye)  sliowing  tliat  the  annual  supply  has  exceeded 
the  Price  Current's  statement  by  fully  17,000.000  bushels.  At  the  time  this  reckless,  mis- 
leading aud  wholly  incorrect  statement  wiis  sent  out  the  ofticial  data,  both  as  to  jnoduc- 
tiou  and  importatiini,  had  long  been  readily  available,  showing  the  facts  to  be  entirely  at 
variance  with  Price  Current  utterances. 

Every  issue  of  the  Price  Current  that  the  writer  has  examined  carefully  has  been  filled 
with  errors  of  like  character,  but  space  permits  but  a  small  fraction  to  be  enumerated, 
aud  the  statement  of  one  or  two  more  must  suffice. 

In  its  issue  of  July  23d  the  Price  Current  states  the  annual  average  production  of 
rye  in  Eoumania  to  be  40,000,000  bushels  and  that  of  Italy  to  be  15,000,000.  In  its  latest 
official  out-givings  the  Roumanian  government  shows  the  rye  acreage  to  be  less  than 
430,000  acres  and  to  produce  40,000,000  on  such  an  area  the  yield  must  exceed  81  bushels 
per  acre,  aud  to  produce  crops  averaging  15,000,000  bushels  the  rye  fields  of  Italy  must 
yield  more  than  38  bushels  per  acre. 

Aside  from  the  improbability  of  such  yields  when  the  Price  Current  sent  forth  such 
preposterous  statements  there  was  available,  in  the  June  report  of  the  United  States 
Department  of  Agriculture,  the  official  report  of  the  Italian  Ministry  showing  that  from 
1884  to  1889,  inclusive,  the  crops  of  rye  had  averaged  but  4,084,000  bushels,  while  the  July 
report  of  tho  Department,  likewise  available  when  this  absurd  publication  was  made, 
shows  the  yield  of  rye  in  Roumauia  in  1889  to  have  been  10,305.000  bushels. 

When  the  attention  of  the  Price  Current  was  called  to  these  very  wide  discrepan- 
cies, and  it  was  asked  to  name  its  authority  for  such  statements,  the  editor  wrote: 

"I  do  not  find  the  data  on  which  the  compilation  you  refer  to  was  based,  as  to  Rou- 
mania,  but  I  think  this  item  was  obtained  from  Beerbohm,  while  the  figures  for  Italy  / 
think  were  from  a  compilation  which  I  published  four  or  five  years  ago,  from  sources  tljen 
deemed  authentic,  as  an  indication  of  average  production  jyrevioun  to  that  time.  I  pre- 
sume I  may  soon  find  this  material  aud  if  it  is  difl'ereiit,  especially  with  lefereuce  to 
Roumauia,  I  will  address  you  again." 

This  is  an  astounding  confession  coming,  as  it  does,  from  the  editor  of  a  journal 
that  poses  as  an  authority  upon  so  grave  a  suiject  as  food  production  and  consumption — 
a  subject  that  involves  the  well  being  of  nearly  every  man,  woman  and  child  in  America. 
At  best  the  Price  Current  is  convicted,  out  of  its  own  mouth,  of  imposing  upon  the  public 
so-called  data  that  has  had  no  revision  for  years,  for  which  it  is  unable  to  name  any 
authority  and,  this  too,  when  an  abuudance  of  official  data  was  readily  available. 

It  seems  that  the  Price  Current  does  not  know  where  its  figures  came  from,  ho-y  they 
originated,  and  it  has  been  shown  that  they  not  only  vary  from  week  to  week  but  in  the 
3ame  issue  and  column. 

Is  not  this  one  of  the  most  bare-faced  frauds  that  was  ever  perpetrated  upon  confid- 
ing patrons  who  are  paying  for  this  sort  of  stufl'  and  relying'  upon  it  for  ihe  direction  of 
their  business? 

Th"  investigations  of  the  writer  show  that  much,  if  not  all,  the  so-called  data  of 
this  sheet  is  of  this  character,  and  the  evidence  furnished  by  the  editor's  confession. 


76      THE  VALUE  OF  A  TRADE  JOURNAL'S  DATA. 

shows  that  instead  of  being  derived,  as  it  all  sliould  be,  from  available  official  sources  the 
data  used  by  the  Price  Current  is  raked  from  the  gutter,  takeu  from  the  scrap-heap  or  selected 
from  the  waste-basket. 

Reading  the  Price  Current  in  the  bright  light  thrown  upon  it  by  this  partial  analysis 
of  its  statements  and  nieihods,  and  having  such  knowledge  of  tlie  character  of  its  so-called 
•data  as  we  thus  obtain,  tlie  question  at  once  presents  itself: 

What  does  this  sheet  now  desire  to  prove?  By  whom  and  in  what  interest  is  it 
retained,  and  what  is  the  amount  of  the  retainer?  Or  is  its  mendacity  and  utter  disre- 
gard of  connnou  honesty,  in  its  dealings  with  its  jxitrons,  the  logical  result  of  infinite 
capacity  foi'  error  and  lack  of  ability? 

Of  what  value  are  its  deductions  when  the  entire  basis  of  the  fabric  is  a  matter  of 
reckless  guess  work  and  fabrication? 


EUROPEAN    REQUIREMENTS    AND    PROBABLE    SUPPLIES   OF   RYE 
AND   WHEAT    DURING    THE    1891-92   CEREAL   YEAR. 

Requirements  for  bread 2,400,000,000  bushels 

Itequiremeuts  for  seed 300,000,000      " 

Total  requirements 2,700,000,000     " 

Probable  cut-turn  of  European  fields ..1,800,000,000  bushels 

Si'ed  required— a  constant  quantity 300  000,000      " 

Seven  and  one-half  montlis'  food  supply 1,500  000,000      "  1,800,000  000     " 

Deficit  equal  to  4J  months' food  supply...  900,000,000      " 
America.  India  and  all  other  countries  can  sup- 
ply at  outside 280,000,000      " 

Ultimate     European    deficit     equal     to    three 

mouths'  needs 620,000,000      " 

Potatoes  and  other  substitutions  may— possibly— be  equal  to  half  of  one  month's 
consumption,  but  tliis  is  not  probable,  as  the  potatoes  are  always  consumed  in  addition  to 
the  wheat  and  rye;  but  admitting  that  such  substitutions  will  equal  half  a  mouth's  con- 
sumption, how  are  me  other , two  and  a  half  months  to  be  covered? 


-i»e^- 


In  Central  Russia  tliere  are  IS  provinces  which  the  KiefT correspondent  of  (he  Liv- 
erpool Corn  IVade  News,  for  whose  reliability  the  editor  vouches  in  the  strongest  terms, 
after  careful  personal  inspection,  says  have  not  harvested  as  much  grain  as  was  sown. 
These  18  provinces  contain  39,000,000  inhabitants,  and  are  not  only  the  most  populous 
but  the  most  productive  of  the  whole  Empire,  and  largely  constitute  its  granary.  If 
these  provinces  have  not  grown  the  seed  sown  liow  are  they  to  be  fed?  The  remainder 
of  the  Umpire  does  not  ■produce  a  xvrplus  equal  to  the  food  requirements  of  39,000,000 
people. 

With  Europe  producing  but  seven  and  a  half  months'  food  and  the  outside  world 
able  to  furnish  but  one  and  a  hull'  months'  supply,  would  it  not  be  good  business  policy 
for  American  farmers  to 

"HOLD  THE  WHEAT?" 


GAMBLING    IN   FOOD    PRODUCTS. 

It  may  be  true,  as  Mr.  B.  P.  Hutchinson  says  iu  the  North  American  Review  for 
October,  that  all  operations  iu  the  grains  benefit  the  producer,  but  if  he  means,  as  would 
appear  from  the  context,  that  such  operations  as  constitute  ninety-nine  per  cent,  of  the 
transactions  upon  the  Boards  of  Trade  then  issue  will  be  taken  with  this  sweeping  asser- 
tion by  i  vast  number  of  conservative  people  aside  from  the  producers,  who  aje,  prac- 
tically, a  unit  in  the  belief  that  harm,  and  harm  only,  can  result  from  such  operations 
whether  they  temporarily  advance  or  depress  prices. 

We  are  told  that  but  for  this  form  of  speculation: 

"The  farmer  could  only  sell  his  grain  to  local  buyers,  who  would  be  liable  to  get 
full  and  stop  buying,  and  then  the  farmer  would  be  compelled  to  wait  for  customers;  and 
in  the  meantime  a  mortgage  might  be  foreclosed  on  his  farm,  even  while  the  wheat  in  his 
bins  would  more  than  satisfy  the  mortgage  if  converted  into  cash." 

The  farmer  objects  not  to  speculation  so  much  as  to  that  sort  of  speculation  of 
which  Mr.  Hutchinson  might  be  termed  "an  instructive  example." 

The  farmer  does  not,  and  probably  never  has,  objected  to  that  speculation  which, 
when  more  grain  was  being  marketed  by  the  grower  than  was  required  by  the  consumer, 
impels  the  buying  of  grain  as  an  investment,  places  it  in  a  warehouse  to  await  that  time 
so  sure  to  come  when  the  volume  of  products  being  marketed  by  the  grower  shall  be  in- 
sufticientto  meet  current  requirements,  the  result  being,  in  the  abseuce  of  the  short-seller, 
such  an  advance  in  its  value  as  to  render  the  investment  a  remunerative  one. 

Prior  to  the  evolution  of  the  short-seller  such  speculative  buying  took  the  surplus 
grain  which  the  farmer  desired  to  sell  and  stored  it  for  the  consumer,  a  reasonable  charge 
being  made  for  the  laudable  service. 

This  may  be  termed  speculation,  but  it  is,  as  well,  legitimate  commerce,  and  is 
wholly  different  from  that  speculation  which  finds  its  province  in  the  buying  and  selling 
of  "options"  and  "puts  and  calls."  The  trouble  with  Jlr.  Hutchinson  and  the  class  which 
he  represents  is  that  they  have  no  conception  of  commercial  ethics  and  confound  gam- 
bling with  speculation  and  commerce,  desiring  us  to  believe  that  gambling  is  both  moral 
and  commendable,  as  well  as  necessary  to  the  welfare  of  the  comnmnity,  and  especially 
to  that  of  the  farmer,  whom  they  represent  as  likely  to  fall  into  irretrievable  ruin  but  for 
the  kindly  offices  of  the  Board  of  Trade  gambler,  who  puts  prices  up  or  down  at  will,  and 
at  times — as  just  after  the  Hutchinson  wheat  corner  of  1888 — renders  it  impossible  to  sell 
grain,  in  the  country,  at  any  price. 

This  fraternity  is  most  solicitous  lest  the  farmer  shall  be  unable  to  sell  bis  wheat 
and  pay  ofl'  a  mortgage  that  otherwise  might  be  foreclosed,  but  they  seem  to  forget  the 
Old  saying  so  long  current,  "good  as  wheat,"  and  that  in  no  part  of  the  United  States  is 
it  a  very  difficult  matter  to  borrow  money  on  wheat  in  the  farm  granary  and  that  the  one 
farmer  in  danger  of  having  bis  farm  sold  under  foreclosure  is  that  one  who  has  no  wheat 
or  but  an  unsufflcient  amount,  in  his  granary. 

It  is  possible  that  the  farmer  may  have  to  wait  for  customers,  but  certainly  not 
long  while  men  continue  to  eat,  and  the  speculator,  be  be  of  the  laudable  kind  or  of  the 
short-selling  variety,  does  not  add  anything  to  the  numlier  of  consumers  or  hasten  the 
consumption  of  the  farmer's  wheat  by  one  minute,  nor  is  it  within  his  power  to  lessen 
the  consumption,  although  the  short-seller  can,  and  doubtless  does,  lessen  the  price 
which  the  farmer  receives  by  placing  in  competition  quantities  of  flat  products  which 
areas  illimitable  as  are  his  greed  and  lack  of  commercial  honesty. 

Although  the  writer  has  probably  not  seen  as  many  years  as  the  advocate  of  gam- 
bling in  food  products,  yet  he  has  bought  and  sold  much  grain  and  has  never  seen  a  time 
— except  at  the  end  of  some  such  gambling  operation  as  that  of  September,  1888,  upon 
which  Mr.  Hutchinson  delights  to  expatiate — when  grain  was  not  readily  salable,  and 
prior  to  the  time  when  modern  methods  of  short-selling  and  running  corners  came  into 
vogue  prices  were  far  more  stable  and  fluctuations  less  destructive  of  legitimate  profits. 
Until  mankind  is  able  to  live  without  food  the  farmer  will  have  a  market  for  all  he  can 
produce,  and  instead  of  hereafter  waiting  for  customers  all  the  coming  years  are  likely  to 
see  the  consumer  hurrying  up  the  farmer  and  trying  to  hasten  the  marketing  ot  crops 
that  will  rarely  reach  to  the  end  of  the  harvest  year. 


78  GAMBLING  IN   FOOD   PRODUCTS. 

Probably  few  men  know  better  tbau  Mr.  Hutchiusou  that  up  to  tlie  time  when 
short-selling  became  the  means  of  determining  prices  the  warehouses  were  filled  with 
grain  bought  as  an  investment  whereas  now  these  warehouses  stand  less  than  one-third 
full  the  year  through  the  capitalist  being  afraid  to  invest  money  in  property  the  value  of 
which  may  be  so  greatly  lessened  in  a  day,  by  the  limitless  offers  of  the  short-seller,  as  to 
entail  loss. 

Thus  has  that  kind  of  speculation,  which  is  at  best  but  the  worst  form  of  gambling, 
destroyed  that  laudable  speculation  which  made  a  market  for  the  products  of  the  farm 
before  they  were  needed  by  the  consumer.  Not  only  did  this  beueficient  form  of  specula- 
tion go  on  at  the  trade  centers  but  at  every  railway  station  and  mill  in  the  country  ali- 
sorbing  and  taking  out  of  sight  an  enormous  aggregate  of  farm  products.  Now,  however, 
instead  of  buying  grain  to  store  the  miller  buys  an  "option"  and  if  the  price  goes  up  col- 
lects tlie  difference  from  the  short-seller  and  goes  into  the  market  and  buys  the  grain  the 
day  he  desires  to  grind  it  his  profit  being  found  in  the  saving  of  waste,  insurance,  inter- 
est and  storage  room  all  of  which  accrue  to  the  benefit  of  the  miller  or  short-seller.  In 
other  words:  in  consideration  of  the  deposit  of  a  small  margin  by  the  miller  the  short- 
seller  furnishes  a  vest-pocket  elevator,  insurance  company,  bank  accomodations  and  a 
guarantee  against  waste — all  of  which  operates  against  the  farmer  who  must  carry  the 
grain  and  in  ease  he  requires  money,  while  the  price  is  lower  than  he  believes  it  ought 
to  be  and  will  be,  he  must  borrow  from  the  banker. 

While  the  short-selling  speculator  thus  deprives  him  of  the  purch.iser,  for  distant 
use,  that  he  formerly  enjoyed  it  is  not  the  worst  phase  of  the  comijetitiou  of  the  short, 
seller  as  the  grain  which  the  miller  and  investment  buyer  formerly  took  from  off  the 
market,  and  stored  until  needed  for  consumption,  now  all  presses  with  fearful  weight 
upon  a  market  that  is  also  loaded  down  by  the  daily  offering  of  hundreds,  and  some" 
times  thousands  of  millions  of  fiat  products. 

The  amount  of  grain  required  for  current  consumption  is  a  constant  quantity  ami 
more  being  offered  than  is  required  will  necessarily  depress  the  price,  be  it  actual  grain  or 
simply  the  promises  of  the  short-seller  to  deliver  at  some  future  day,  and  the  volume  of 
such  offerings  necessarily  determines  the  price.  If  less  than  the  current  requirements 
prices  are  advanced  by  the  buyer  who  has  failed  to  secure  the  quantity  his  customers  de- 
mand, while  on  the  contrary  if  the  quantity  offered  is  largely  in  excess  of  current  needs 
and  there  are  no  investing  buyers  of  actual  grain  the  price  recedes.  The  world's  yearly 
requirements  of  wheat  and  rye  now  approximate  closely  to  3,600,000,000  bushels,  and, 
excluding  Sundays  and  holidays,  this  implies  daily  needs  of  12,000,000  bushels;  hence  we 
may  assumfe  that  If  the  offerings  for  any  considerable  period  exceed  the  sum  of  the  daily 
requirements  the  efl'ect  will  be  to  lessen  prices,  and  so  long  as  the  offerings  continue  to  be 
greater  than  the  consumption  so  long  will  the  tendency  of  prices  be  downward  and  no 
advance  in  price  can  be  expected,  uo  matter  what  the  probabilities  as  to  the  future  supply 
may  be,  until  the  pinch  of  scarcity  shows  that  the  offerings  of  the  short-seller  are  but 
emanations  from  the  lungs  of  a  horde  of  unprincipled  gamblers.  So  long,  however,  as 
the  actual  deliveries  of  the  farmer  exceed  or  equal  the  world's  requirements  and  these 
offerings  of  flat  products  continue  and  there  are  no  investment  buyers  of  the  farmer's 
surplus  there  can  be  no  permanent  advance. 

It  goes  without  saying  that  so  long  as  these  conditions  obtain  and  so  long  as  more 
flat  grain  is  offered  upon  the  markets  of  the  world,  by  these  industrious  producers  of 
"promises  to  deliver,"  so  long  must  the  farmer  expect  low  pi'ices,  and  instead  of  being  a 
benefit  to  the  producer  this  kind  of  speculation— which  has  certainly  slaughtered  all  in- 
vestment buying  of  grain — is  the  greatest  curse  that  could  be  inflicted  upon  any  com- 
munity by  a  horde  of  gamblers  who  are  under  the  protection  of  the  law,  and  who  plume 
themselves  upon  their  ability  to  run  wheat  up  to  two  dollars  a  bushel;  advance  the  price 
of  the  loaf  and  make  the  "other  fellow"  settle  his  bets  at  a  price  which  the  successfu' 
worker  of  the  corner  fixes  at  twice  the  sum  the  farmer  receives  lor  the  product  of  the 
fields  upon  which  his  labor  has  been  expended  and  in  which  he  has  invested  a  vast  cap- 
ital. 

When  a  successful  corner  has  been  made  possible  because  there  happens  to  be  but 


GAMBLING  IN   FOOD  PRODUCTS.  79 

3,330,000  bushels  of  the  "contract  grade"  of  wheat  that  could  be  got  to  market  within  the 
month — September  1888 — (although  the  country  was  full  of  wheat  of  lower  grade  thut 
would  miike  good  bread)  the  worker  of  the  corner,  by  paying  two  dollars  u  buehe' 
for  one  or  more  car-loads  of  the  contract  grade,  fixes  the  price  at  which  be  will  settle 
with  those  who  are  "short  to  him" — mind  you  the  last  thing  that  he  desires  is  that  thay 
shall  be  able  to  deliver  the  grain  which  he  has  contracted  to  receive  yet  never  expected  or 
iutended  to  receive,  and  had  the  "shorts"  been  able  to  have  delivered  a  few  hundred 
thousand  bushels  more  no  doubt  the  corner  would  have  been  broken  and  the  cornerer 
bankrupted  instead  of  the  shorts,  although  lie  might  still  have  plumed  himself  with  hav- 
ing advanced  the  price  of  the  loaf  of  which,  however,  there  is  no  proof. 

Expatiating  upon  the  benefits  of  this  kind  of  speculation  to  the  producer  Mr. 
Hutchinson  neglects  to  inform  the  reader  that  immediately  he  had  settled  with  the 
"shorts"  upon  their  contracts,  to  deliver  grain,  that  would  certainly  have  ruined  him  if 
complied  with,  the  price  of  wheat  dropped  back  to  about  what  it  was  when  he  started  to 
work  the  corner  and  that  many  of  the  short  sellers  had  beeustripped,  by  such  sfitlement, 
as  bare  as  when  they  came  into  the  world,  and  the  business  of  the  country  h  .  .  inen  dis- 
turbed that  one  man  might  have  "gain  without  merit." 

Is  it  not  illogical  to  say  that  when  wheat  is  too  cheap  the  selling  of  "options"  and 
'•puts  and  calls"  aids  the  producer  and  in  the  next  breath  tell  us  that: 

"Grain  operations  benefit  the  consumer  also;  because  when  there  is  an  excess  of 
bread-stuffs,  a  low  price  stimulates  consumption  and  gives  a  big  loaf  and  when  there  is  a 
deficit  a  high  price  enforces  economy  and  teaches  him  to  eat  more  potatoes  and  esculent 
roots  and  less  bread  and  thus  give  his  neighbor  a  chance  at  the  loaf?" 

It  is  somewhat  difficult  to  understand  how  speculation  can  add  to  one's  appetite 
and  stimulate  consumption.  Is  it  a  fact,  that  here,  where  all  but  those  in  extreme  indi- 
gence are  always  fully  fed,  that  a  low  price  stimulates  consumption  of  the  cheapest  form 
of  food?  Have  not  our  people  at  all  times  all  tlie  bread  they  are  able  to  consume?  Is  it 
not  known  to  every  school  boy  that  bread  is,  by  far,  the  cheapest  form  of  food  when  nu- 
tritive properties  are  considered? 

While  we  were  long  since  told  that  "man  shall  not  live  by  bread  alone"  it  still  re- 
mains the  one  constant  factor  in  the  diet  of  the  bread-eating  people  and  being  the  cheuj" 
est  form  in  which  the  masses  can  readily  obtain  the  required  nutriment  is  the  last  to  be 
dispensed  with,  and  the  quantity  eaten  is  lessened  in  but  a  slight  degree  by  an  advance 
in  price.  When  flour  was  selling  at  $15  per  barrel,  during  the  Crimean  w 'r.  there  is  no 
evidence  that  consumption  was  malerially  lessened  either  in  this  country  or  Western 
Europe. 

Few  will  question  the  benefits  derived  from  the  use  of  capital  in  dealing  with  food 
products,  but  it  is  not  the  capital  of  the  pernicious  short-seller  which  performs  the  laud- 
able service  of  distribution.  • 

While  nothing  could  be  more  remote  from  the  desire  of  the  writer  than  to  belittle 
the  services  of  capital  actually  employed  in  distribution,  it  is  his  desire  to  call  attention 
to  the  fact  that  what  is  known  as  the  visible  supply  of  grain,  during  the  last  ten  years 
has  averaged  under  30,000,000  bushels  of  wheat,  less  than  10,000,000  bushels  of  corn  and 
some  .5,000,000  bushels  of  oats,  with  small  quantities  of  rye  and  barley,  all  aggregating 
some  4(5,000,000  bushels  and  worth  less  than  $40,000,000  and  it  is  quite  safe  to  say  that 
adding  the  value  of  all  the  crude  food  and  fiber  products  in  transit,  in  mill,  warehouse 
and  factory,  as  well  as  the  value  of  the  plants  used  In  their  distribution,  the  entire  sum 
would  at  no  time  exceed  $.500,000,000.  On  the  other  hand  the  farmer,  who  is  never 
thought  of  us  a  capitalist,  has  invested  in  his  land  and  its  equipment  for  production  a 
sum  that  probably  exceeds  §16,000,000,000  and  as  he  carries  an  average  of  half  the  year's 
crop  for  the  entire  p  riod  his  further  investment  is  over  $700,000,000  and  in  this  form 
alone  greatly  exceeds  the  entire  investment  of  all  those  directly  engaged  in  the  distribu- 
tion of  his  products. 

I  trust  that  the  short-.selling  gamblers  of  the  Boards  of  Trade  will  pardon  the  sug- 
gestion that  the  farmer  could  get  on  much  better  without  their  aid  than  can  the  real  cap- 
italist, engaged  in  distribution,  get  on  without  the  farmer,  who  is  not  called  upon  to  be 


80  GAMBLING   IN   FOOD  PRODUCTS. 

specially  grateful  for  the  use  of  such  sums  as  the  distributors  use  in  the  furtherance  of 
their  business. 

Would  it  not  be  well  if  other  members  of  the  coummunity  should  recognize  the 
'act  that  the  farmer  employes  a  vast  capital  in  his  business?  Would  it  not  also  be  well 
if  the  fact  was  more  generally  recognized  that  when  the  capital  of  the  farmer  is  unprofit- 
ably  employed,  by  reason  of  inadequate  prices  for  his  products,  every  interest  suffers  and 
stagnation  pervades  the  economic  fabric? 

It  is  beyond  controversy  that  the  prosperity  of  the  nation,  as  a  whole,  waits  upon 
the  prosperity  of  that  forty  per  cent.,  more  or  less,  that  inhabits  the  farm.  Yet,  there 
seems  a  tacit  combination  of  others  to  prevent  the  farmer  from  getting  such  a  price  for 
his  products  as  their  cost  and  supply  and  demand  now  .justify  and  when  it  appears  that 
the  farmer  is  likely  to  secure  such  a  return  as  will  afford  him  something  more  than  the 
meager  subsistence  which  has,  of  late,  been  his  only  reward,  the  grain  gambler,  the 
transporter,  merchant  and  banker  rush  into  print  and  tell  us  that  if  we  insist  upon  such 
prices  as  will  aflnrd  a  fair  return  for  the  services  of  the  farmer  we  shall  scare  away  the 
starving  customer  from  Europe  who  can  find  supplies  no  where  else  on  earth  and  others 
will  take  possession  of  markets  that  we  alone  have  the  means  of  supplying.  So  great 
is  the  solicitude  lest  the  farmer  shall  secure  something  near  what  the  worker  of  the  wheat 
corner,  of  September,  1888,  was  able  to  squeeze  out  of  the  "shorts",  as  the  value  of  the 
bushel  of  wheat  which  ihey  failed  to  deliver  upon  their  gambling  contracts,  that  there  is 
held  up  to  our  horrified  gaze  the  poor  Russian  who  is  likely  to  loose  his  hold  upon  the 
markets  of  Western  Europe  because  the  Tzar  has  found  it  necessary  to  prohibit  the  ex- 
portation of  rye  lest  the  50,000,000  people  inhabiting  the  stricken  provinces  should  perish. 

Another  "bugaboo"  which  the  venerable  dealer  in  "puts  and  calls"  holds  up  to 
frighten  the  farmer  from  ruining  the  export  market  by  insisting  upon  the  fair  price  for 
his  products  which  the  scant  supply  warrants  is  that  the  Scandinavian  peasant,  whom 
we  are  told  now  eats  bread  made  from  half  tree  bark  and  half  flour,  will  add  another 
twenty-flve  per  cent,  of  this  most  nutritious  substance  and  deprive  the  American  wheat- 
grower  of  a  market !  Since  when  have  Swedes,  Norwegians  and  Danes  taken  to  a  bark 
diet?  What  is  its  nutritive  value?  What  is  the  tree  which  furnishes  this  edible  sub- 
stance?   Does  it  produce  annual  crops  of  edible  bark  and  will  it  thrive  in  America? 

Does  n')t  our  speculative  friend  know  that  while  Scandinavia  yearly  imports 
some  2,500,000  bushels  of  wheat  and  about  12,000,000  bushels  of  rye  that  Scandinavian  ex- 
ports of  other  cereals  exceed  such  quantities  by  some  6,000,000  bushels? 

Does  it  not  approach  the  ridiculous  to  even  suggest  that  the  Tzar  hazards  the  mar- 
ket for  Russian  grain  in  trying  to  save  the  lives  of  his  starving  subjects  by  retaining  a 
crop  of  rye  that,  added  to  all  the  wheat  that  has  been  harvested,  is  officially  found  to  be 
less  than  the  ordinary  requirements  of  the  Russian  people  by  more  than  a  hundred 
million  bushels? 

The  essayist  informs  us  that  he  "has  studied  this  subject — presumably  that  of  the 
world's  food  supply,  as  well  as  short-selling— closely  and  for  a  long  time."  He  has  cer- 
tainly studied  it  to  little  purpose  if  he  has  not  learned  that  with  average  crops  upon  so 
much  of  its  surface  as  the  world  has  thus  far  been  able  to  devote  to  the  production  of  rye 
and  wheat  that  the  annual  product  is  now  less  than  the  world's  annual  requirements  by 
hundreds  of  millions  of  bushels  and  that  the  annual  deficit  is  increasing  at  the  rate  of 
more  than  30,000,000  bushels  per  year,  and  that  the  reason  the  pinch  of  scarcity  has  not 
sooner  been  felt  was  to  be  found  in  the  existence  of  great  reserves  heaped  up  in  the  years, 
])rior  to  1886,  when  the  world's  wheat  area  (and  production)  was  in  excess  of  current 
lequirements. 

Is  it  possible  that  the  essayist  is  ignorant  of  the  fact  that  while  the  bread-eaters  of  the 
world  have,  since  1885,  increased  fully  38,000,000  and  the  requirements  of  wheat  and  rye 
augmented  by  more  than  230,000,000  bushels— equal  to  the  product  of  more  than  19,000,000 
average  acres — the  wheat  and  rye  acreage  of  the  world  has  increased  barely  2,000,000  acres 
and  but  for  the  drafts  which  the  world  was  able  to  make  upon  reserve  stores  the  bread- 
eaters  of  many  lands  would  long  since  have  known  the  pinching  scarcity  which  implies 
high  prices? 


GAMBLING  IN  FOOD  PRODUCTS.  81 


It  would  appear  impossible  that  after  such  long  aud  close  study  the  essayist  should 
oe  ignorant  of  the  fact  that  during  the  ninth  decade  the  wheat  and  rye  area  of  the  world 
increased  but  14  percent,  as  against  an  increase  in  the  wheat  and  rye  eating  population 
of  no  less  than  14  per  cent. 

Because  the  people  of  America  have  not  been  called  upon  to  sup])ly  any  consider- 
able part  of  the  rye  required  by  the  people  of  Europe  the  short-selling  fraternity  either 
forget  or  are  ignorant  of  the  fact  that  when  rye  is  scarce  wheat  nii:st  very  largely  take  its 
place,  and  that  the  scarcity  of  one  necessarily  affects  the  demand  ami  price  for  tlie  other. 
as  they  seem  to  be  ignorant  of  the  fact  that  in  dealing  with  the  world's  supply  of  bread- 
stuffs  they  must  be  treated  as  one  in  order  to  measure  the  world's  needs  with  any  degree 
jf  accuracy. 

While  the  essayist  tells  us  that  in  consequence  of  the  Tzar's  proclamation  Russia  is 
likely  to  "have  an  unsold  surplus  and  have  lost  valuable  customers."  does  he  not  know 
that  a  famishing  man  will  not  put  seed  in  the  ground  that  he  needs  to  prevent  immediate 
starvation,  and  that  such  is  to-day  the  condition  of  a  great  part  of  Russia,  and  that 
the  press  is  now  teeming  with  the  information  that  the  sowings,  in  the  famiue  stricken 
provinces,  are  thus  being  greatly  curtailed,  as  I  said  they  were  likely  to  be  as  long  ago  as 
oarly  in  June? 

There  are  those  who  anticipate  a  greatly  reduced  out-turn  from  Russian  fields  dur- 
ing the  near  by  years  as  the  result  of  the  present  dearth  of  seed,  the  loss  of  great  numbens 
iif  work  animals,  and  the  starvation  or  dispersion  of  no  inconsiderable  number  of  the 
cultivators. 

If  such  anticipations  are  realized  only  in  part  it  will  be  years  before  Russia  need 
mourn  the  lo.ss  of  customers,  whose  places,  however,  are  likely  to  be  taken  by  those  whom 
we  now  supply,  but  which  Mr.  Hutchinson  agrees  with  me  in  saying  must  give  place  to 
■'the  immense  population  that  will  occupy,  before  many  years,  the  territory  between  the 
Mississippi  and  the  Atlantic." 

To  convince  us  that  we  should  let  the  short-seller  determine  the  price  for  our  prod- 
ucts in  such  u  way  as  not  to  scare  away  our  customers  we  are  told  that: 

•'We  might  if  excessively  greedy  for  money,  drive  the  consumers  to  using  substi- 
tutes, and  that  would  i)e  bad  for  both  sides.  In  the  interior  of  Cuba,  San  Domingo  and 
Brazil  the  poorer  classes  never  see  bread  at  all." 

While  this  is  doubtless  very  interesting  and  instructive,  it  is  difficult  to  see  what  is 
the  value,  as  customers  of  the  wheat  grower,  of  people  who  never  see  bread,  and  it  seems 
quite  safe  to  say,  judging  from  what  we  know  of  periods  of  scarcity  in  the  past,  that  so 
long  as  people  can  secure  the  means  of  purchase  they  will  continue  to  eat  bread,  as  did 
the  people  of  Britain  in  1801  when  wheat  sold  for  $5.40  per  bushel,  aud  when,  as  during 
the  first  twenty  years  of  this  century,  the  English  loaf  was  made  from  wheat  that  cost, 
on  an  average  of  $2.60  per  bushel,  the  price  of  the  quartern  loaf  once  rising  to  forty-seven 
cents  although  it  has  recently  sold  for  less  than  ten  cents  while  wages,  of  the  English  ar- 
tisan and  laborer,  are  now  much  higher  than  in  the  earlier  decades  of  the  century. 

Even  when  wheat  was  selling  at  $5.40  per  bushel  the  poor  would  not  substitute  the 
Indian  rice  upon  which,  as  a  measure  of  relief,  the  government  had  thrown  away  a 
Ijounty,  to  induce  importation,  of  no  less  than  $1,700,000  prefering  to  buy  the  high 
priced  wheat. 

By  the  way,  does  it  not  appear  a  little  singular  that  Mr  Hutchinson  did  u<  t  dis- 
cover when  he  put  wheat  iip  to  two  dollars  a  bushel  in  1888  that  "it  would  be  bad  for 
both  sides"?  That,  however,  being  mostly  wind  wheat,  he  probably  felt  justified  in 
acting  upon  the  theory  that  as  it  could  not  be  eaten  the  consumer  would  not  be  attected 
although  he  likes  to  say  that  it  did  enhance  the  price  of  the  poor  man's  loaf. 

The  history  of  the  entire  past  shows  quite  conclusively  that  the  last  thing  to  Ije  dis- 
pensed with  is  bread.  If  an  economy  in  food  becomes  necessary  such  articles  of  diet  as 
are  either  less  nutritive  or  more  costly  will  first  be  dispensed  with  and  it  may  not  be 
amiss  to  remind  the  short-sellers  that  when  the  necessity  for  substitution  arises  the  sub- 
stitutes are  usually  not  obtainable  in  suflicient  volume  to  afl'ord  much  relief  and  the  very 
fact  of  the  substitution  of  a  less  desirable  article  tor  one  to  which  the  consumer  has  al- 


82  GAMBLING  IN   FOOD  PRODUCTS. 

ways  been  accustomed  and  for  which  he  has  a  great  preference  implies  quite  as  high  pri- 
ces as  the  producer  of  the  scarce  article  is  likely  to  desire. 

When  the  crops  of  wheat  and  rye  are  greatly  deficient  it  is  not  unusual  for  the  oth- 
er crops  to  be  meager  and  those  who  talk  so  glibly  of  substitutions  seems  to  have  lost 
sight  of  tlie  fact  that  such  things  as  potatoes,  other  grains,  and  all  possible  substitutes  but 
tree  barb,  are  rarely  produced  in  excess  of  current  needs  and  are  all  consumed  in  addition 
to  the  wheat  and  rye  even  in  years  of  average  yield  of  all  food  crops.  This  year  of  defic- 
ient production  of  rye  and  wheat  proves  to  be  no  exception  in  this  respect,  as  in  the 
devastated  districts  of  Russia  other  crops  are  nearly  or  quite  as  deficient  as  those  of  the 
bread-making  grains,  and  the  potato  crop  is  as  complete  a  failure  as  it  is  possible  for 
mind  to  conceive,  while  that  of  hay  is  little  if  any  better,  and  the  pastures  have  been 
sere  and  brown  the  year  through,  the  result  being  that  the  farmer  can  neither  sell  nor 
feed  his  animals,  as  no  one  has  forage. 

That  potatoes  cannot,  this  year,  be  substituted  for  the  deficient  grains,  over  the 
most  of  Central  and  Western  Europe,  is  made  certain  by  the  character  ♦f  a  potato  crop 
which  is  nowhere  above  an  average  and  over  vast  areas  is  greatly  below  rendering  it  clear 
that  the  quantity  harvested  will  be  below  the  amount  ordinarily  consumed  and  indicat- 
ing the  desirability  of  even  finding  some  substitute,  other  than  tree  bark,  for  the  deficient 
potatoes. 

In  Europe,  as  a  whole,  other  roots  are  a  deficient  crop,  and  this  is  especially  true 
of  wide  areas  in  Britain,  while  there  is  fear  of  great  distress  in  Ireland  because  of  potato 
blight. 

In  France  a  lai'ge  part  of  the  frost-ravaged  wheat  fields  were  resown  to  oats,  the 
crop  of  which  is  some  1.5  per  cent,  above  the  average,  and  in  France  oats  are  not  unlikely 
to  be  substituted,  in  part,  for  wheat  and  rye,  both  of  which  are  greatly  deficient  in  quan- 
tity and  even  more  so  as  to  quality,  some  recent  estimates  putting  the  wheat  fit  for  mill- 
ing as  low  as  50  per  cent,  of  a  yield  estimated  to  aggregate  not  more  than  64  per  cent,  of 
an  average,  while  in  no  case  is  the  grain  up  to  the  standard  in  either  weight  or  nutritive 
power. 

Thomas  Tooke,  in  his  work  on  prices,  lays  it  down  as  an  axiom  that  "a  very  small 
deficiency  in  the  case  of  necessaries  will  cause  a  very  great  increase  in  the  price:  e.  g.^ 
that  wheat  may  rise  from  100  to  300  per  cent,  when  the  deficiency  in  the  crops  is  not 
more  than  15  or  30." 

The  writer  estimates  the  wheat  and  rye  crops  of  the  world,  just  harvested,  to  be 
from  18  to  20  per  cent,  below  an  average,  and  by  reason  of  an  acreage  deficient  for  some 
years  the  aggregate  product  to  be  20  per  cent,  below  the  world's  requirements.  The 
reader  can  readily  make  the  application  of  Tooke's  law. 

Mr.  Hutchinson  tells  us  we  supply  Europe  because  we  have  a  new  soil,  plenty  of 
acres  and  use  implements  that  cheapen  production,  and  that  a  dollar  a  bushel  for  wheat 
at  Minneapolis  means  a  great  deal  for  such  a  farmer  as  Oliver  Dalrymple  who  is  repre" 
sented  as  saying  "that  his  wheat  cost  him  about  thirty  cents  a  bushel  with  a  good  yield." 

How  many  farmers  are  there  in  the  world  who  grow  wheat  under  as  favorable  con- 
ditions as  Mr.  Dalrymple?  Does  not  even  two  per  cent,  on  all  their  investments  mean 
much  to  such  capitalists  as  a  Vanderbilt  or  an  Astor  while  meaning  very  little  to  the 
widow  whose  whole  fortune  is  but  five  thousand  dollars? 

Mr.  Hutchinson  forgets  to  tell  us  how  often  Mr.  Dalrymple  secures  the  "good 
yield"  which  enables  him  to  produce  wheat  at  about  thirty  cents  a  bushel,  but  the  inten- 
tion seems  to  be  that  the  impression  should  go  abroad  that  to  produce  wheat  upon  o>ir 
western  farms  it  costs  but  thirty  cents  per  bushel,  and  that  a  dollar  for  it  at  the  great 
markets  means  that  the  farmer  will  roll  in  wealth  and  vie  with  the  railroad  magnate  in 
his  expenditures,  hence  the  insistence  upon  a  fair  price  for  his  grain  is  all  wrong. 

While  it  is  within  the  possible  that  some  of  Mr.  Dalrymple's  crops  may  have  been 
produced  at  a  cost  as  low  as  thirty  cents,  yet  I  venture  the  suggestion  that  such  sum  does 
not  begin  to  represent  the  average  cost  of  the  crops  he  has  grown  during  the  last  five 
years,  as  I  know  that  twice  that  sum  does  not  begin  to  cover  the  cost  of  growing  wheat 
upon  lands,  that  even  in  this  new  country,  require  considerable  expenditures  for  fertili- 


GAMBLING   IN   FOOD   PRODUCTS.  88 

zatiou,  aud  it  is  both  unjust  to  tile  farmer,  aud  misleading,  to  put  forward  such  a  state- 
ment, as  the  cost  of  production,  which  it  is  quite  safe  to  assume,  averages  mucli  nearer  a 
(lolliir  aud  still  leaves  little  as  a  return  for  the  capital  invested. 

Were  it  otherwise,  would  not  western  farmers  be  more  prosperous,  and  would  ho 
many  of  the  farms  be  subject  to  foreclosure  were  the  sliort-seller  to  be  prevented  from 
making  a  market  for  wheat  ? 

If  wheat  could  be  profitably  grown  at  twice  thirty  cents  it  is  safe  to  say  that  but 
few  farms  would  be  in  danger  of  being  sold  under  foreclosure.  The  low  price  of  wheat — 
wheat  being  the  key  to  the  aggricultural  situation — no  matter  how  brought  about,  has 
l>een  the  primary  cause  of  the  continued  existence  of  American  farm  mortgages,  as  it  has 
lieeu  of  the  bankruptcy  of  so  many  of  the  tenant  farmers  of  Britain,  and  it  is  the  effect  of 
short-selling  to  continue  tliese  low  prices,  when  the  conditions  of  supply  warrant  high 
ones,  that  constitute  the  burthen  of  the  farmer's  objection  to  that  form  of  speculation  for 
which  Mr.  Hutchinson  appears  as  the  advocate,  aud  which,  in  practice,  assumes  the 
worst  possible  form  of  gambling,  as  the  losses  ultimately  all  fall  upon  the  farmer  who 
takes  no  voluntary  part  in  the  game,  is  its  most  unwilling  victim,  and  is  never  permitted 
to  share  in  the  winnings. 

We  are  told  by  Mr.  Hutchinson  that:  "South  America  will  have  from  the  Argen- 
tine Republic  a  surplus  of  perhaps  30,000,000  busliels." 

Is  it  not  strange  that  after  such  "long  and  close  study"  of  this  subject  Mr.  Hutuh 
insou  should  so  presume  upon  the  credulity  or  ignorance  of  the  public  as  to  put  fortli 
such  a  statement  when  reference  to  the  Consular  report  for  April,  1890,  page  610. 
shows  the  exports  of  wheat  from  Argentina  to  have  been  8,730,000  bushels  in  1S87, 
(1,560,000  bushels  in  1888  and  but  840,000  bushels  in  1889,  the  aggregate  for  the  three 
years  being  Init  little  more  than  half  that  thirty  million  bushels  that  the  public  is  now 
fold  we  may  expect  from  a  crop  that  has  yet  to  pass  the  critical  period  of  its  growth  and 
which  covers  but  about  3,000,000  acres?  Was  this  statement,  that  is  a  third  greater  than 
the  entire  exports  of  the  last  four  years,  put  forward  in  ignorance  or  for  the  purpose  of 
misleading  the  public? 

The  whole  short-selling  fraternity  constantly  exagerate  the  extent  of  the  crops  and 
the  exjiortable  surplus  of  the  wheat  growing  countries  and  then  base  upon  such  exagger- 
ations an  argument  for  low  prices,  aud  they  are  now  engaged  in  sending  abroad  state- 
ments that  although  we  have  exported  60,000,000  bushels  from  this  crop  we  still  have  an 
exportable  surplus  remaining  of  from  200,000,00(1  to  1^50,000,000  bushels  and  can  supply  all 
the  needs  of  Europe  without  difficulty  aud  shall  have  an  unmarketable  surplus  left  upon 
our  hands  if  we  do  not  hurry  our  grain  to  market  at  a  low  price. 

A  favorite  argument  of  the  short-seller  is  that  there  is  a  harvest  somewhere  in  the 
world  every  month  in  the  year,  hence  there  can  be  no  enduring  scarcity.  This  is  not 
true  so  far  as  relates  to  commercial  crops  of  the  bread-making  grains,  and  these  instruct- 
ors of  the  public  neglect  to  tell  us  that  the  entire  exportable  surplus  of  wheat  of  the 
southern  hemisphere  would  barely  furnish  Europe  with  bread  for  three  days,  and  that 
the  cultivated  area  of  that  hemisphere,  outside  the  tropics,  is  less  than  that  of  the  one 
State  of  Illinois. 

The  short-seller  makes  the  claim  that  his  sales  do  not  and  cannot  afTect  the  price 
for  farm  products,  as  the  seller  implies  the  buyer.  While  this  may  be  nominally  true 
where  actual  sales  of  even  options  are  made  there  are  an  immense  number  of  "wash- 
sales"  constantly  being  made  for  the  purpose  of  breaking  down  prices  that  the  short" 
seller  may  buy  in  his  outstanding  contracts  at  a  profit,  and  when  the  great  short-sellers 
enter  into  a  combination,  as  they  often  do,  to  "bear"  prices  they  usually  eflTect  their  ob- 
ject and  the  lower  prices  are  hammered,  and  the  less  buying  the  greater  are  their  offerim/s- 
and  it  is  these  offeringt;  that  determines  the  price  which  the  farmer  is  forced  to  accept  for 
his  products,  and  thus  is  he  most  directly  afiected  by  all  these  operations. 

That  these  operations,  while  making  the  price  for  the  products  of  the  farm,  are  fic- 
titious aud  but  gambling  devices  is  made  most  clear  by  the  fact  that  delivery  of  property 
but  in  rare  instances  follows  the  making  of  these  hundreds  of  thousands  of  contracts  to 
deliver.     For  instance,  at  the  close  of  the  September,  1801,  deals,  during  which  month  thou- 


84  GAMBLING   IN    FOOD   PRODUCTS. 

iands  of  millions  of  bushels  of  wheat  and  corn  were  contracted  to  be  delivered  at  Chicago 
by  the  short-siUers,  the  actual  deliveries  at  the  maturity  of  these  contracts  were  less  than 
50,000  bushels  of  wheat  and  35,000  bushels  of  corn,  the  other  "deals"  having  been  settled  by 
payment  of  the  difference  ivhich  constituted  the  winnings  of  the  fortunate  gamblers. 

Does  uot  Mr.  Hutchinson  know  that  when  by  such  operations  the  price  of  wheat 
lias  been  reduced  to  the  extent  of  one  cent  a  bushel  it  means  much  to  farmers  other  than 
Mr.  Dalrymple,  and  that  upon  an  average  wheat  crop  it  amounts  to  no  less  than  a  loss  of 
154,500,000  to  the  producer? 

Mr.  Hutchinson  informs  us  that  among  the  brightest  of  the  great  millers  who  have 
placed  Minneapolis  at  the  head  of  the  milling  world  is  Mr.  Charles  A.  Pillsburj',  but  he 
is  careful  not  to  inform  his  readei's  what  are  the  opinions  of  this  the  greatest  dealer  in  the 
world  in  actual  farm  products  as  to  the  practice  of  short-selling,  as  set  forth  on  pages  65 
and  70  ante. 

The  Cincinnati  Price  Current  says: 

"Here  is  the  evil — the  sale  of  wind  contracts,  inflated  by  the  margin  system,  hav- 
ing the  same  power  of  influencing  values  that  an  equal  offering  of  actual  property  would 
have." 

Mr.  Denison  B.  Smith,  Secretary  of  the  Toledo  Board  of  Trade,  says: 

"We  most  heartily  deprecate  the  conditions  prevailing  in  this  country.  First 
is  the  apparent  want  of  courage  on  the  part  of  capitalists  to  invest  in  wheat,  and  the  next 
is  the  reckless  disposition  of  the  fraternity  of  short-sellers  to  pound  down  prices.  Not  an 
advance  in  prices  has  occurred  on  this  side  that  has  not  been  reflected  abroad,  and  not  a 
decline  that  has  not  been  followed  by  a  corresponding  break  over  there." 

The  first  of  Mr.  Smith's  conditions  is  the  inevitable  corollary  of  the  second,  and 
the  capitalist  will  recover  his  courage  and  invest  in  wheat  the  moment  the  short-seller  is 
taxed  out  of  existence. 

This  evil  has  now  invaded  the  markets  of  Britain,  and  in  the  Liverpool  correspond- 
ence of  Dornhusch  of  September  5th,  1891,  it  is  stated  that: 

"Our  local  market  is  dominated  bj' a  crowd  of  dealers  in  'options'  and  'futures,' 
putting  prices  up  and  down  every  ten  minutes,  and  with  a  similar  state  of  things  in 
America  it  is  diflticult  to  know  where  we  are." 

About  May  1st,  Leopold  Bloom  retired  from  the  Chicago  wheat  pit  worth  "a  clean 
million  dollars"  and  was  reported  in  the  Chicago  Tribune  as  giving  his  reasons  for  retir- 
ing in  the  following  language: 

"It's  too  much  of  a  strain  on  a  man  to  stand  for  any  length  of  time  without  wearing 
out.  One  is  under  pressure  all  the  time.  He  is  betting  his  money  against  the  market. 
If  he  buys  and  she  goes  up  he  is  a  winner.  If  she  goes  down  he  is  a  loser.  It's  a  plain 
case  of  gamble,  but  it's  legal  and  faro  isn't.  If  they  would  take  the  limit  ofl'  faro  it 
would  be  a  better  game  than  wheat,  because  you  could  get  quicker  action  but  with  the 
limit  on  there  i.^n't  money  enough  in  it." 

Mr  Bloom  is  much  more  frank  in  rightly  characterising ihe  game  than  are  most  of 
its  devotees  who  appear  to  be  ashamed  of  its  real  character. 

Shall  twenty  thousand  short-sellers  be  longer  permitted  to  bring  the  product  of 
their  lungs  (which  costs  nothing)  into  destructive  competition  with  the  useful  and  costly 
products  of  the  world's  many  millions  of  farms  in  which  is  invested  more  than  $100,000- 
000,000? 

The  conscience  of  the  nation  has  decreed  the  suppression  of  the  Louisiana  lottery 
that  is  far  less  immoral  than  short  selling  and  inflicts  harm  only  upon  those  voluntarily 
becoming  its  victims. 

Must  the  great  industrial  hosts  of  the  farm  suflTer  that  a  mere  squad  (comparatively) 
of  worthless,  short-selling  gamblers  may  continue  to  bet  upon  prices  and  secure  "gain 
without  merit?" 


f-aHlVBESIT' 


THE  FOLLOWING  TABLE 

Shows  the  Average  Annual   Product   of   Rye  and   Wheat,  the  Estimated  Requlre- 
nnents,  and  the  Out-turn  promised  by  the  harvest  of  1891. 


France 

Russia,  Poland  and  Finland 

Austria-Hungary  

Germany    

Italy 

Spain 

United  Kingdom 

Roumania 

Turicey,  Bulgaria  and  Roumelia 

Belgium 

Netherlands  

Switzerland 

Portugal,  Greece,  Servia  and  Scandinavia 

North  America 

South  America 

Australasia 

India    

Other  Countries 


World  Totals^ 


Annual  average 
product  of 

Rye  and  Wheat 
1881  to  1890 


Requirements 

of 

Rye  and  Wheat 

for  the  1891-2 

cereal  year 


385,000,000 

960,000,000  j 

282.000,000  I 

313,000,000  1 

122,000,000 

121,000,000 

81.000,000 

46,000,000 

51,000,000 

38,000,000 

18.000,000 

8.000,000 

76,000,000 

502,000,000 

31,000,000 

35,000,000 

253,000,000 

120,000,000 


Estimated 

out-turn  of 

Rye  and  Wheat 

harvest  of 

1891 


3,442,000,000 


416,000,000 

800,000,000 

266,000,000 

377,000,000 

150,000,000 

130.000,000 

236.000,000 

30,000,000 

44,000,000 

66,000,000 

36,000,000 

21,000,000 

106,000,000 

426,000,000 

40,000,000 

32,000,000 

226,000,000  I 

130,000,000 

3,534,000,000 


274,000,000 

590,000.000 

250,000,000 

242.000,000 

120.000,000 

104,000,000 

70,000,000 

46,000,000 

61,000,000 

26,000,000 

16,000,000 

7,000,000 

70,000,000 

591,000,000 

44,000,000 

39,000,000 

255.000,000 

120,000,000 


2,916,000,000 


An  apparent  world  deficit  of  18  per  cent,  or  619.000,000  bushels. 
It  should  be  remembered  that  rye  forms  thirty-eight  per  cent,  of  the  two  great  bread- 
making  grains  and  that  of  the  bread  eaten  in  Europe  it  constitutes  no  less  than  forty- 
seven  per  cent.,  and  that  in  dealing  with  the  requirements  of  the  world,  rye  and  wheat 
can  not  be  separated. 

There  can  be  no  doubt  ihat  the  London  News  is  correct  when  it  says  that  American 
farmers  are  the  masters  of  the  situation,  and  can  fix  their  own  price  for  the  great  crop 
now  being  harvested. 


ERRATA. 

Page  10— Second  line  from  top  should  read  "short  of  bread-stufls." 

Page  17— At  close  of  last  line  substitute  for  "in  or"  "or  in  other  cases." 

Page  19— First  line  should  read  "is  likely  to  become." 

Page  19— Third  line  of  second  paragraph  should  read  "necessaries  of  life.' 

Page  35 — Fourth  line  of  third  paragraph  should  read  "great  markets." 

Page  35— Fourth  and  fifth  paragraphs  should  be  read  as  one. 

Page  54— Fifth  word  of  fourth  paragraph  is  "cut." 


'a 


^  OTf  TEi. 


TO  22925 


